Delhi District Court
One Of The Grounds Urged On Behalf Of The vs . on 23 February, 2013
IN THE COURT OF SH. SAURABH PARTAP SINGH LALER
METROPOLITAN MAGISTRATE06 (East),
KARKARDOOMA COURTS, DELHI.
CC No. : 926/07
PS : Mandawali
Offence complained of : 138 N.I. Act
Unique Case ID No. : 02402R0179362007
The Akarshan Cooperative Thrift & Credit
Society Ltd.
857/4A, Main Road Mandawali, Delhi92.
.............. Complainant
Vs.
Manohar Lal S/o Late Sh. Har Chandi
R/o 38/3, Varun Niketan, Pitampura, Delhi88.
DIV ® East, EBlock, Preet Vihar, Delhi Jal Board, Preet Vihar, Delhi.
............. Accused
Date of Institution : 08.03.2007
Plea of accused : Pleaded not guilty
Date of pronouncement : 23.02.2013
Final Order : Acquitted
BRIEF STATEMENT OF THE REASONS FOR THE DECISION
1. The Complainant's case in brief is that the accused took loan from the
complainant for his personal use vide loan No.518 and the loan amount was also
released to the accused and in discharge of his overdue liability the accused
issued a cheque bearing No. 030507 dated 13.01.2007 of Rs.24,940/ drawn on
Post office Saving bank ND GPO1 which on presentation got dishonored vide
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memo dated 16.1.2007 and returned back with remarks "Insufficient Funds".
Thereafter, a Legal Notice dated 23.01.2007 Ex. CW1/C was sent by
complainant through his counsel by Regd. A.D. and UPC vide postal receipts Ex.
CW1/D and CW1/E on 27.01.2007. However, despite that the accused failed
to make any payment within the statutory period, hence, this complaint.
2. Complainant led presummoning evidence and thereafter, accused was
summoned u/s 138 N.I. Act vide order dated 8.03.2007.
3. Upon appearance of the accused, copies were supplied to the accused free of
cost. Notice was framed against the accused u/s 138 N.I. Act on 27.04.2009 to
which the accused pleaded not guilty and claimed trial.
4. The matter was thereafter listed for complainant evidence and in complainant
evidence CW1 Nirmal Singh was examined. Statement of Accused was
recorded on 29.3.2012 and after that th accused lead Defence Evidence in which
the accused examined himself and he also examined DW1 Ashish Kumar
pandey from Registrar of Cooperative Society and DW2 Hari Shyam. DE was
closed on 5.11.2012.
5. The questions before the court for the disposal of the complaint are:
(i) Whether the cheque in question was given by the accused to the
complainant in discharge of legally enforceable debt?Disputed as
the accused in his testimony as DW3 on oath stated that the
cheque in question blank signed was given by him to the
complainant society as security.
(ii)Whether the cheque in question was dishonored on presentation?
Undisputed, as the accused never disputed the fact that the
cheque was dishonored and this fact also stands proved from
the return memo Ex. CW1/B.
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(iii)Whether the reason for dishonor of cheque was Insufficient
Funds?Undisputed, as the accused never disputed that the
cheque was dishonored because of aforesaid reason and this
fact also stands proved from the return memo Ex. CW1/B.
(iv)Whether the cheque was presented within the period of 6 months
from the date when it was issued?Undisputed, as the accused
never disputed that the cheque was presented in time and this
fact also stands proved from Ex. CW1/A wherein date of
cheque is 13.01.2007 and return memo Ex. CW1/B and Legal
Notice dated 23.1.2007 which was sent on 27.1.2007.
(v)Whether the complainant made a demand for the payment of
amount of money under the cheque by giving a notice in writing to
the accused within 15 days of receiving information as regards
dishonor of cheque from the bank?Disputed, as the accused
denied on oath as DW3 that he had received legal notice.
(vi)Whether the accused failed to make payment of cheque amount
within 15 days of receipt of said notice?Undisputed, as the
accused never took the defense that the payment was made by
him, rather, he took the defence that the cheque in question
was was given by him to the complainant society as security
for the loan taken by him form the complainant and that the
same was misused by the complainant.
6. On the basis of the evidence on record, complainant sought conviction on the
ground that the cheque in question was given by accused towards repayment of
the overdue amount of Rs.24,940/.
7. On the other hand, Ld. Defence Counsel sought acquittal on the ground that the
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cheque in question was issued as security cheque against the loan taken and
that the said stolen cheque has been misused by the complainant by filing the
present case.
8. EVIDENCE PRODUCED BY THE COMPLAINANT IN SUPPORT OF THE
ALLEGATIONS:
In order to prove the allegations, CW1 Nirmal Singh appeared in the
witness box as CW1 and filed his affidavit by way of evidence in which he
reiterated the allegations made by him in the complaint. The documents produced
by the complainant and exhibited are:
(a) Dishonored cheque bearing No. 030507 - Ex. CW1/A.
(b ) Returning Memo - Ex. CW1/B.
(c) Legal Notice dated 23.01.2007 - Ex. CW1/C.
(d) Receipt of Regd. A.D. - Ex. CW1/E.
(e) UPC - Ex. CW1/D.
(f ) Loan Bond Ex. CW1/X.
(g) Resolution - Ex.CW1/Y
(h) Authorisation Letter - Ex.CW1/Z
9. PRESUMPTION :
The complainant produced the original cheque, return memo, legal
notice and postal receipt/ courier receipt. He also appeared as witness to support
his allegations with his testimony by way of affidavit.
Thus, the complainant produced sufficient material on record for
raising the mandatory presumption, which is required to be raised in terms of
section 118 (b) and section 139 of the Act, in favour of the holder of the cheque (the
complainant), that the same has been issued for discharge of any debt or liability.
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At this stage the court would like to refer to judgments of Apex Court,
i.e., NEPC Micon Ltd. Vs. Magma Leasing Ltd. 1999 4 SCC 253, MMTC Ltd. Vs.
Medchi Chemical and Pharma Pvt. Ltd. AIR 2002 SC 182 AND Rangappa Vs.
Mohan AIR 2010 SC 1898.
In the said judgments after detailed discussion, the Apex Court
observed that in cases where the cheques are dishonored by reason of stop
payment instruction/ account closed an offence under section 138 could still be
made out. It has been held that the presumption under section 139 is attracted in
such a case also. That even when the cheque is dishonored by reason of account
closed by virtue of Section 139 the Court has to presume that the cheque was
received by the holder for the discharge, in whole or in part, of any debt or liability.
Of course this is a rebuttable presumption.
An argument was raised as regards the extent of presumption which
can be raised in favour of the complainant and against the accused. While the
complainant submitted that the presumption is as regards legally enforceable debt,
the accused submitted that the presumption is as regards existence of debt only
and not as regards legally enforceable debt.
However this issue now stands settled in the light of the judgment titled
Rangappa Vs. Mohan AIR 2010 SC 1898 where a three Judges bench of the Apex Court
overruled the judgment titled Krishna Janardhan Bhat Vs. Dattatraya G. Hegde AIR
2008 SC 1325 and observed in para 14 that
"the presumption mandated by Section 139 of the Act does indeed include
the existence of a legally enforceable debt or liability. To that extent, the
impugned observations in Krishna Janardhan Bhat (Supra) may not be
correct. ...............this is of course in the nature of a rebuttable presumption
and it is open to the accused to raise a defence wherein the existence of a
legally enforceable debt or liability can be contested." (emphasis supplied)
The judgment titled Hiten P. Dalal Vs. Bratindranath Banerjee, AIR 2001
Supreme Court 3897(1) discusses the scope and ambit of the presumption raised under
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section 139 N.I. Act in the following words :
"The effect of these presumptions is to place the evidential burden on the
accused of proving that the cheque was not received by the complainant
towards the dishcarge of any liability. Because both Sections 138 and 139
require that the Court "shall presume" the liability of the drawer of the cheques
for the amounts for which the cheques are drawn, as noted in it is obligatory
on the Court to raise this presumption in every case where the factual basis for
the raising of the presumption had been established. It introduced an
exception to the general rule as to the burden of proof in criminal cases and
shifts the onus on to the accused. Such a presumption is a presumption of
low, as distinguished from a presumption of fact which describes provisions
by which the Court "may presume" a certain state of affairs. Presumptions are
rules of evidence and do not conflict with the presumption of innocence,
because by the latter all that is meant is that the prosecution is obliged to
prove the case against the accused beyond reasonable doubt. The obligation
on the prosecution may be discharged with the help of presumptions of law or
fact unless the accused adduces evidence showing the reasonable possibility
of the non existence of the presumed fact."
It is further held that :
"The distinction between the two kinds of presumption lay not only in the
mandate to the Court, but also in the nature of the evidence required to rebut
the two. In the case of discretionary presumption the presumption if drawn
may be rebutted by an explanation which 'might reasonably be true and which
is consistent with the innocence" of the accused. On the other hand in the
case of a mandatory presumption "the burden resting on the accused person
in such a case would not be as light as it is where a presumption is raised
under Section 114 of the Evidence Act and cannot be held to be discharged
merely by reason of the fact that the explanation offered by the accused is
reasonable and probable. It must further be shown that the explanation is a
true one. The words 'unless the contrary is proved' which occur in this
provision make it clear that the presumption has to be rebutted by proof and
not by a bare explanation which is merely plausible. A fact is said to be
proved when its existence is directly established or when upon the material
before it the Court finds its existence to be so probable that a reasonable man
would act on the supposition that it exist. Unless therefore, the explanation is
supported by proof, the presumption created by the provision cannot be said
to be rebutted."
Thus, in the present case also a presumption arises in favour of the
complainant and against the accused that the cheques in question were issued in
discharge of a legally enforceable debt or liability.
10. DEFENCE OF THE ACCUSED :
The accused has admitted that the cheque belongs to him, and he has
also admitted his signature on the same. However, accused took the defence that
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the said cheque was given as security by him to the complainant at the time of
taking loan from the complainant.
The court would now discuss the evidence on record and the
arguments put forth by the parties in tabular form for proper appreciation of
evidence and issues between the parties :
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Sr. No. Accused Complainant
1 :Authorized It has been argued by the accused that The resolution and the authority letter
representative the complainant has been represented by filed by Nirmal Singh are not proper and
not duly Nirmal Singh who is not duly authorized to thus the complaint has not been filed by
authorized to appear for the complainant as the authorized person and liable to be
file this case authorization letter Ex.CW1/Z and dismissed.
and represent resolution Ex.CW1/Y in this regard is not
the proper.
complainant.
2 : Legal The accused on oath denied having The complainant on the other hand
Notice received Legal notice Ex. CW1/C. It was contended that the Legal Notice was
whether argued by the accused that the legal sent to the accused through Registered
served or not. notice was never served upon the Post and also through UPC and as the
accused and that there is no proof of same was never received back therefore
service of legal notice and no witness has there is a presumption of service of the
been examined by the complainant in this accused which the accused has not
regard. He also contended that UPC can rebutted though in his defence he could
be easily procured and the address on the have called post office official to show
postal receipt is incomplete and thus the that the registered post was never
presumption cannot be raised against him served upon him.
as regards service of notice.
3 : Payment The accused has submitted that there is a The complainant submitted that the
disputed dispute as regards the amount of loan accused had taken loan from the
granted by the complainant and there is complainant and the Loan Bond Ex.
also dispute as regards the amount due CW1/X clearly mentions the amount of
as per the statement filed by the loan and that the accused has also
complainant. It was submitted that there is admitted in his cross examination that
no receipt of the amount of loan granted he had taken loan from the complainant
and that in the complaint, legal notice and society.
affidavit of CW1 it has not been
mentioned as to how much loan was
taken by the accused.
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Sr. No. Accused Complainant
4 : Cheque It was argued by the accused that the The complainant argued that the cheque
given as cheque in question was given as security in question was given by the accused for
security to the complainant society against the discharge of his liability and for this
loan taken and that despite the fact the he reason the accused never made a
has repaid the loan amount, the complaint to any authority that his blank
complainant society Is misusing the cheques have been taken by the
cheque in question by filling the same with complainant and despite the filling of the
whatever amount and presenting it and present complaint the accused has not
filling this case. It was also submitted that approached any authority alleging that
in the Legal Notice the complainant has his cheques are being misused
itself admitted that the cheque in question
was given at the time of taking loan
whereas in the complaint it is stated that
the cheque was issued by the accused
towards payment of overdue amount.
1.Authorized
representative not duly authorized to file this case and
represent the complainant: It has been argued by the accused that the
complainant has been represented by Nirmal Singh who is not duly authorized to
appear for the complainant as the authorization letter Ex.CW1/Z and resolution
Ex.CW1/Y in this regard is not proper.
The complainant on the other had submitted that Nirmal Singh has been duly
authorized to file the present complaint.
A perusal of the record reveals that the present complaint has been
filed by Nirmal Singh, who has filed authorization letter Ex.CW1/Z and
resolution Ex.CW1/Y in this regard.
The question before the court is whether the present complaint has
been filed by the payee or holder in due course of the bounced cheque
or not as per s.142(1) N.I Act?
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The court would like to refer to two judgments in this regard which
would make it clear as to whether the present case has been properly filed or
not.
The first case is Meeta Rai Vs. Gulshan Mahajan 1999 (22) Civil CC
(P&H) and relevant paras of the said judgment are as under:
1. ...............One of the grounds urged on behalf of the petitioner is that
the impugned complaint has not been filed by the payee or the
holder in due course of the cheque which is alleged to have
bounced and it was issued by the respondent. A perusal of the copy of
the impugned complaint filed in the Court of Chief Judical Magistrate. Amritsar (copy Annexure P5) will show that the complaint was filed by one Gulshan Mahajan son of Amar Nath Mahajan c/o Pioneer Press. Katra Sher Singh, Amrtisar. In Para 1 of the impugned complaint, it was averred as under:"That the complainant is the husband of Sucheta Mahajan daughter of Sh. Gian Chand Gupta and she has given authority letter for institution of the complaint against the accused for the dishonour of cheque. Even otherwise the complaint (complainant?) is fully conversant with the facts of the case on instant complaint."
2. Annexure P7 is the copy of the authority letter which is said to have been issued by Smt. Sucheta Mahajan wife of the complainant Shri Gulshan Mahajan and it reads as under :
1. Sucheta Mahajan wife of Sh. Gulshan Mahajan daughter of Sh. Gian Chand Gupta C/o Pioneer Press, Katra Sher Singh, Amritsar do hereby appoint and authorise my husband Shri. Gulshan Mahajan son of Sh. Amar Nath Mahajan to institute complaint under Section 138 of Negotiable Instruments Act against Ms. Meeta Rai, Headmistress, Delhi Public School.
Basant Vihar, New Delhi, Director RMS System and Chemical Speciality Pvt. Ltd. New Delhi regarding dishonoured cheque amounting to Rs. 2,75,000/ bearing cheque number 774346, dated 30.12.1993 drawn on Dena Bank, Nehru Place, New Delhi.
He is further authorised to give evidence in the case as he is conversant with all the facts of the payment of cheque. All, acts done by him in respect of filing of complaint in criminal court and engaging counsel, summoning the witness, filing of misc. Applications pertaining to this case, give reply if any as and when required in connection with this dishonoured cheque.
Dated : April, 1994.
Sd/ Executant (SUCHETA MAHAJAN)"
Page No.: 10 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) (emphasis supplied) The issue was finally decided by the Honorable Punjab and Haryana High Court in para 4 and 5 which are as under:
4. The facts in the instant case are entirely different and distinct from the case of Surinder Singh (supra) inasmuch as in the instant case, there is no document of General Power of Attorney executed by Smt. Sucheta Mahajan in favour of her husband Shri Gulshan Mahajan and for that matter nor even his document of Special Power of Attorney authorising her husband to do certain acts for and on her behalf. Apart from it, it is relevant to note that the authority letter in nowhere undertakes that the executant, namely, Smt. Sucheta Mahajan would be bound by the acts done and conducted on behalf of her husband in respect of the matter which is the subject matter of authority letter. Learned Counsel for the petitioner cited the judgment reported as U. C. Saxena, Managing Director, Meltra Machines & Equipments Pvt. Ltd., Noida v. Shri Madan Mohan 1995(1) RCR (Crl.) 394 : 1993(3) RCR (Crl.) 391 :
1993(2) PLR 161, when the learned Single Judge of this Court held in para 7 as under "As mentioned herein before, Madan Mohan complainant was neither the payee nor the holder in due course of the cheque and, therefore, he was not competent to institute the complaint. The learned trial Magistrate has gravely erred in having failed to consider the above aspect of the case. Therefore, I have no hesitation to hold that the Court below could not have taken cognizance of the complainant (complaint?) as far as the offence under Section 138 of the Negotiable Instruments Act is concerned."
5. By applying the ratio of the decision in the case of U.C. Saxena (supra), in the instant case, the complaint filed by Shri Gulshan Mahajan, a person who has not been legally and validly authorised by means of a general power of attorney or a special power of attorney cannot be held to be a properly instituted complaint in law and the same is liable to be quashed on that score alone....
(emphasis supplied) The second Judgment where similar issue has been decided is O.P. Mehra vs Raj Kumari Bhalla And Anr. II (2007) BC 589 some portions of which are quoted below:
7. Secondly, Counsel for the petitioner submitted that the aforesaid complaint was not signed, made and filed by the payee or holder in due course of the cheques, which are alleged have been bounced. Thus, in view of Section 142(1) of the Act, no Court can take cognizance on such complaint filed by a person other than the payee or the holder in due course of the bounced cheque. Counsel submitted that Page No.: 11 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) as per the decision of the Supreme Court in Janki Vasudeo Bhojwani and Anr. v.
Indusind Bank Ltd. and Ors. 1 (2005) BC 399 (SC) : 2004 AIR SCW 7064, a general or special power of attorney holder can appear, plead and act on behalf of the party and he can also file a complaint under Section 138 of the Act, but he cannot become a witness. But in the instant case, Shri V.M. Bhalla, who has filed the instant complaint on behalf of his wife Smt. Raj Kumari Bhalla is not the general or special power of attorney holder of his wife. The instant complaint has been filed only on the basis of an authority letter given by Smt. Raj Kumari Bhalla to her husband which has been marked as Mark C1 in the Trial Court and which reads as under:
Authority Letter I, hereby authorise Mr. V.M. Bhalla S/o Shri Devi Dayal Bhalla. resident of H. No. 3367. Sector 27D, Chandigarh to file complaint under Section 138 of Negotiable Instruments Act, against M/s. Sagar Suri Estate and Finance Ltd. CMDIG, Sagar Suri, Sagar Apartment6, Tilak Marg, New Delhi and others in the competent Court, to appear on every date on my behalf to give statement, to compromise, to receive payment, to issue receipt or to withdraw the complaint, to engage Counsel and to do all things which he may deem fit for prosecution of the above said complaint. Counsel for the petitioner submitted that merely on the basis of such an authority letter, neither a complaint under Section 138 of the Act can be filed nor such person can appear as a witness on behalf of the complainant. Such an authority letter cannot be treated as general power of attorney of the executant, because in this authority letter, it is nowhere undertaken that the executant would be bound by the acts done and conducted on her behalf in respect of the cheques, which are subjectmatter of the authority letter. In support of his contention, Counsel for the petitioner relied upon a judgment of this Court in Meeta Rai v. Gulshan Mahajan 1999(2) RCR (Criminal) 383, in which in similar circumstances, it was held that on the basis of such an authority letter, no cognizance can be taken for the offence under Section 138 of the Act.
The said contention was answered by the Honorable Punjab and Haryana High Court in Para 12 and 13 which are as under:
12. I also find force in the second contention raised by Counsel for the petitioner. Section 142(1) of the Act provides that no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint in writing made by the payee or, as the case may be the holder in due course of the cheque. Undisputedly, in the instant case, the complaint has been filed by Shri V.M. Bhalla, the husband of Smt. Raj Kumar Bhalla.
He was neither the payee nor the holder in due course of the cheque. He is also not a general or special power of attorney holder of his wife. He had filed the instant complaint only on the basis of the authority letter, which has been reproduced in paragraph 7 of this order. In the said authority Page No.: 12 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) letter, it was no where undertaken that the executant would be bound by the acts done and conducted on her behalf in respect of the cheques, which are subject matter of the authority letter. It is well settled, as has been held by the Supreme Court in Janki Vashdeo Bhojwani and Anr. v. Indusind Bank Ltd. and Ors. (supra) that a general or special power of attorney holder can appear plead and act on behalf of the party and he can also file a complaint under Section 138 of the Act, but he cannot become a witness on behalf of the party. However, the instant complaint has not been filed by Shri V.M. Bhalla being the general or special power of attorney holder. Exactly the similar controversy was dealt with by this Court in Meeta Rai v. Gulshan Mahajan (supra) where also a complaint under Section 138 of the Act was filed on similar authority letter and this Court observed as under:
4. The facts in the instant case are entirely different and distinct from the case of Surinder Singh (supra) inasmuch as in the instant case, there is no document of General Power of Attorney executed by Smt. Sucheta Mahajan in favour of her husband Shri Gulshan Mahajan and for that matter nor even his document of Special Power of Attorney authorising her husband to do certain acts for and on her behalf. Apart from it, it is relevant to note that the authority letter in nowhere undertakes that the executant, namely, Smt. Sucheta Mahajan would be bound by the acts done and conducted on behalf of her husband in respect of the matter which is the subject matter of authority letter. Learned Counsel for the petitioner cited the judgment reported as U. C. Saxena, Managing Director, Meltra Machines & Equipments Pvt. Ltd., Noida v. Shri Madan Mohan 1995(1) RCR (Crl.) 394 : 1993(3) RCR (Crl.) 391 : 1993(2) PLR 161, when the learned Single Judge of this Court held in para 7 as under "As mentioned herein before, Madan Mohan complainant was neither the payee nor the holder in due course of the cheque and, therefore, he was not competent to institute the complaint. The learned trial Magistrate has gravely erred in having failed to consider the above aspect of the case. Therefore, I have no hesitation to hold that the Court below could not have taken cognizance of the complainant (complaint?) as far as the offence under Section 138 of the Negotiable Instruments Act is concerned."
5. By applying the ratio of the decision in the case of U.C. Saxena (supra), in the instant case, the complaint filed by Shri Gulshan Mahajan, a person who has not been legally and validly authorised by means of a general power of attorney or a special power of attorney cannot be held to be a properly instituted complaint in law and the same is liable to be quashed on that score alone....
13.In view of the above discussion, this petition is allowed and the criminal complaint No. 115 of 1998 (Annexure P1) filed by the respondent No. 1 as well as the Page No.: 13 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) summoning order and the other consequential proceedings, only qua the petitioner, are hereby quashed."
(emphasis supplied) In the present case the authority letter given by the Complainant Society to the AR is Ex. CW1/Z and the same reads as under:
"Shri. Nirmal Singh S/o late Sh. Atma Ram is hereby authorized on behalf of the complainant company, to initiate criminal complaint case, pursue, conduct, handle, make statements, and do all the needful in the matter."
The Resolution given by the Complainant Society to the AR is Ex. CW1/Y and the same reads as under:
"I board of director meeting hold on 12/1/2007 and vide resolution No.0I. It has been resolved that Mr. Nirmal Singh S/o late Sh. Atma Ram cashier is authorized on behalf of the society Ltd. To initiate criminal complaint case pause, conduct, handle, make sentences, and do all the needful in the matter."
If the wordings of the present authority letter and resolution is compared to the authority letters quoted in the two judgments above it becomes clear that the complaint has been filed by Nirmal Singh, a person who has not been legally and validly authorized by the complainant company by means of a general power of attorney or a special power of attorney or resolution and the present complainant cannot be held to be properly instituted complaint in law and the same is liable to be dismissed and accused acquitted.
Moreover, a perusal of the record reveals that the Authorization letter and Resolution has been signed by Mahender Roy, Chairman. The said documents were required to be signed by the director of the company as per the companies Act but the same has been signed by a Chairman, who has not been examined by the complainant and the complainant has also not produced Form 32 from the Registrar of Companies to show that the said Page No.: 14 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) chairman was also a director in the complainant company. Moreover while in the Authorization letter the complainant is referred to as a company and in the Authorization letter it is mentioned that there is a board of directors of the complainant, in his cross examination date 16.03.2012 the sole complainant witness namely Nirmal Singh stated as under:
"We have no Director. We have only president, vice president, secretary, cashier and executive members. I cannot say as to why the word Director has been used on resolution Ex.CW1/Y/ It is wrong to suggest that have filled resolution Ex.CW1/Y to mislead the court and that is why the Director has been mentioned in the resolution. It is correct that I was there in the meeting when this resolution was passed. 810 office bearers were present in the meeting. It is correct that except two signs no other sign are present on the resolution dated 13.1.07 Ex.CW1/Y"
As per the sole complainant witness there is no director in the complainant organization but the resolution on record mention about Directors and the Authority Letter mentions about complainant being company. Thus, the authorization letter Ex. CW1/Z and resolution Ex. CW1/Y seem to be not proper and the complainant has failed to prove that Nirmal Singh was duly authorized by the complainant to file and pursue this case on behalf of the complainant.
Thus, the present complainant cannot be held to be properly instituted complaint in law and the same is liable to be dismissed and accused acquitted.
2. Legal Notice whether served or not : The accused on oath denied having received Legal notice Ex. CW1/C. It was argued by the accused that the legal notice was never served upon the accused and that there is no proof of service of legal notice and no witness has been examined by the complainant in this Page No.: 15 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) regard. He also contended that UPC can be easily procured and the address on the postal receipt is incomplete and thus the presumption cannot be raised against him as regards service of notice.
The complainant on the other hand contended that the Legal Notice was sent to the accused through Registered Post and also through UPC and as the same was never received back therefore there is a presumption of service of the accused which the accused has not rebutted though in his defence he could have called post office official to show that the registered post was never served upon him.
A perusal of the record reveals that legal notice was sent to the accused by registered post (address on the registered postal receipt is incomplete) and by UPC at his office address i.e. DIV(R) EAST, BBlock Preet Vihar, Delhi Jal Board, Preet Vihar, Delhi. The envelopes were never received by the complainant and thus the complainant rightly seeks to invoke presumption of service in his favour. However, the presumption is not conclusive and can be rebutted by the accused.
In judgment titled Mahmuda Khatun Vs. Ajit Chandra Deka AIR 1978 NOC 112 (GAU) it was observed the Hon'ble Gauhati High Court as under : The presumption of service of a notice sent under registered post is available under sections 16 and 114 (e) of the Evidence Act as well as under Section 27 of the General Clauses Act only when the plaintiff proves that the letter was properly addressed and was put into the Post Office. The mere fact that the full address was given in the body of the notice, does not raise any presumption that the envelope containing the notice was also correctly addressed. At any rate presumption under Sections 16 and 114 (e ) of the Evidence Act as well as under Section 27 of the General Clauses Act is a rebuttable one. When the person on whom the notice is said to have been served appears before the Court and denies on oath that the notice was served on his, the presumption is rebutted and in such a case the evidence of the Postman becomes necessary. (emphasis supplied) Page No.: 16 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) In the present case, the complainant is relying upon the presumption which are in his favour u/s 16 and 114 (e) of the Evidence Act and under section 27 of General Clauses Act and the court understands that the said presumptions are not conclusive presumptions and that they are rebuttable one. The accused has denied on oath as DW3 that the notice was served upon him and in view of such denial on oath the presumption stands rebutted in view of the aforesaid judgment. In view of the said denial by the accused it had become imperative on the complainant to examine the post man in order to prove service of notice. However, in absence of testimony of the post man, the presumption stands rebutted, more so because the address of accused as mentioned in legal notice (address mentions Block E) is different from the address mentioned in the UPC (address mentions Block B).
As regards UPC Hon'ble Supreme Court titled Gadakh Yashwantrao Kankarrao Vs. Evalias Balasaheb Vikhe Patil AIR 1994 SC 678. In order to understand the judgment the court hereby reproduces the relevant para :
th
60. Gadakh's version that he sent the letter dated 16 May, 1991 (Exh. Q) under certificate of posting is unbelievable. A certificate of posting is easy to procure and does not inspire confidence. Moreover, the circumstances belie his version. With his considerable means and past experience of elections, he would have sent such a letter by registered post to ensure its delivery and create cogent evidence of its despatch. Moreover, he would not merely send such a letter but have his denial published in newspapers because of its significance during elections. We have no doubt that Gadakh's conduct belies his belated denial at the trial. (emphasis supplied) ➔Thus, the service of the notice stands proved in view of the legal presumptions and in view of the discussion made above.
3. Payment disputed i.e. Loan amount and Amount due not ascertainable : The accused has submitted that there is a dispute as regards the amount of loan granted by the complainant and there is also dispute as regards the amount due Page No.: 17 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) as per the account statement filed by the complainant. It was submitted that there is no receipt of the amount of loan granted.
The complainant submitted that the accused had taken loan from the complainant and the Loan Bond Ex. CW1/X clearly mentions the amount of loan and that the accused has also admitted in his cross examination that he had taken loan from the complainant society.
The court has gone through the record and found that in the complaint it has not been mentioned as to how much loan was taken by the accused from the complainant. The affidavit of the sole complainant witness Nirmal Singh also fails to mention the amount of loan taken by the accused from the complainant. Thus, it becomes necessary to go through the record filled by the complainant and the testimonies on record to find the actual amount of loan taken by accused and the amount actually due to him.
In cross examination of CW1 Nirmal Singh, he has stated that the loan advanced to the accused was Rs.20,000/ but in the cross examination of accused as DW3 it was suggested to the accused by Ld. Cl for the complainant that he had taken Rs.15,000/ for his use, though the said suggestion was denied by the accused.
It may be noted here that the accused has also stated that he had taken loan of Rs.15,000/ at one place and Rs.12,000/ at other.
Thus the amount of loan advanced to the accused is not clear from the testimonies of the witnesses.
In cross examination the sole complainant witness was asked to produce the loan statement of the accused and a loan statement was also produced by the complainant which is Ex. CW1/D3 but the said statement is of no use to the Page No.: 18 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) complainant as it no where mentions the rate of interest, the period for which the interest has been calculated and also the payments made by the accused towards the loan account. Rather, the said loan account statement shows the casual manner in which the record is being maintained by the complainant and creates a doubt in the mind of the court as regards the liability of the accused. The complainant produced copy of ledger and copy of the loan account statement but as the same were not produced in original thus the said documents were not exhibited and cannot be read in favour of the complainant. Thus the complainant has not been able to prove as to how it has been ascertained that amount due towards the accused is Rs.24,940/. The complainant cannot solely rely upon the presumption under section 139 of NI Act to win the case. The complainant when asked to produce documents as regards liability in cross examination is required to show that from the documents produced the liability of the accused is coming out more than or equal to the cheque amount. If the complainant fails to show the same as has been in this case then, the onus of the accused to rebut the presumption stands discharged. Thus, the accused has discharged his burden of rebutting the presumption under section 139 NI Act.
4. Cheque issued as security : It was argued by the accused that the cheque in question was given as security to the complainant society against the loan taken and that despite the fact the he has repaid the loan amount, the complainant society is misusing the cheque in question by filling the same with whatever amount and presenting it and filling this case. It was also submitted that in the Legal Notice the complainant has itself admitted that the cheque in question was given at the time of taking loan whereas in the complaint it is stated that the cheque was issued by the accused towards payment of overdue amount. Page No.: 19 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) The complainant argued that the cheque in question was given by the accused for discharge of his liability and for this reason the accused never made a complaint to any authority that his blank cheques have been taken by the complainant and despite the filling of the present complaint the accused has not approached any authority alleging that his cheques are being misused.
A perusal of the record reveals that in the Legal Notice Ex.CW1/C it has been mentioned in papa 1 that the accused had issued a post dated cheque in favour of the complainant. The said paragraph is reproduced below:
"That you had taken a loan from my above said client for your personal use vide and against the said loan you have issued a post dated cheque for a sum of Rs.24940 dated 13.1.2007 cheque no.030507"
However, in the complaint and in the affidavit of CW1 it has been stated " that in discharge of his overdue liability the accused issued a cheque bearing No. 030507 for a sum of Rs.24,040/ dated 13/1/07 drawn on POST OFFICE SAVING BANK"
Thus, the complainant in the legal notice has taken a different stand as compared to the stand taken by the complainant in the complaint and affidavit of CW1.
If the contents of the Legal Notice Ex.CW1/C are believed to be true then the cheque in question is a security cheque as the accused at the time of taking loan in 2005 could not have perceived that what would be the outstanding amount as on 13.1.2007. It means that the cheque even if post dated was blank as regards the amount and this fact supports the story of accused that the cheque in question was given as security cheque. The stand of the accused that the cheque was given in blank as security is further supported by two facts:
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(a) Firstly, from the fact that the cheque bears the stamp of the complainant on it in place provided for the name of the bearer. The stamp must have been put by the complainant as it cannot be assumed that the accused had the stamp of the complainant.
(b) Secondly, when the sole complainant witness was questioned as regards who had filled the particulars in the cheque in question, he stated: "I do not remember who had filled the particulars but the signature on the cheque is of the accused"
Thus, the evidence in favour of the accused as regards this issue is much more than that in favour of the complainant and if the cheque was issued as security cheque then offence under section 138 NI Act is not made out in view of the following judgments of various courts including the Honorable Apex Court: Hon'ble Supreme Court in judgment titled M.S. Narayana Menon @ Mani Vs. State of Kerala AIR 2006 SC 3366 observed in para 57 as under :
57. We in the facts and circumstances of this case need not go into the question as to whether even if the prosecution fails to prove that a large portion of the amount claimed to be a part of debt was not owing and due to the complainant by the accused and only because he has issued a cheque for a higher amount, he would be convicted if it is held that existence of debt in respect of large part of the said amount has not been proved. The Appellant clearly said that nothing is due and the cheque was issued by way of security. The said defence has been accepted as probable. If the defence is acceptable as probable the cheque therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act. (emphasis supplied) In Shanku Concretes Pvt. Ltd. Vs. State of Gujarat 2000 Cri.L.J 1988 (Gujarat) a loan of Rs.15,00,000/ was taken by accused, who issued 7 post Page No.: 21 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) dated cheques as collateral security and it was observed by Hon'ble Gujarat High Court that no offence u/s 138 N.I. Act is made out in para 13 and 14 as under :
13. The above view further strengthens from the agreement executed between the parties. It is amply clear in the agreement that accused shall repay amount after six months of the execution of agreement and it is also made clear that for due performance of the contract. The intention of the parties is clear from this averments that the cheques were issued as the collateral security for the due performance (vernacular matter omitted.) of the contract, by which the Company and the Director i.e. accused No. 2 bound themselves to repay the said amount. It is, therefore, clear that cheques were not issued to discharge any existing debt.
14. This Court relies on the decision cited by Mr. Majmudar of the High Court of Madras (supra), wherein a principle is laid down that to attract Section 138 of the Negotiable Instruments Act, it must be pointed out that there was subsisting liability or debt on the date when the contract was entered into. In that given case before the High Court of Madras, the contract expressly made it clear that the cheques were handed over as security. In this case, it is clear from the agreement entered into between the parties that after borrowing the money, making a statement to repay the same at some future date, the cheques were issued for due performance. Therefore, the transaction from its very nature or from the intention of the parties, as reflected in the agreement executed between the parties, is purely of a civil nature, for which a civil suit has already been filed. The very fact that the payment was agreed to some future date and there was no debt or liability on the date of delivery of the cheques, will take the case out of the purview of the Section 138 of the Negotiable Instruments Act.
(emphasis supplied) In Goa Handicrafts Vs. M/s Samudra Ropes Pvt. Ltd. 2005 Cri.L.J 4072 (Bombay) a cheque was given as a security for goods already purchased and for future purchases and it was observed by Hon'ble Bombay High Court in para 18 that dishonour of cheque given as security does not make out an offence u/s 138 N.I. Act :
18. In my view from the discussion of the evidence adduced by both parties it will have to be held that the Accused has successfully rebutted the presumption raised under Section 139 of the said Act in view of the clear admission given by P.W.1, Shirodkar in his crossexamination which is consistent with the stand taken by the Accused in his examinationinchief.
The cheque given by the Accused was, therefore, never meant to be deposited but was referred only as a sort of collateral security. This is clear from the evaluation of the evidence in paras 7 to 11 above. Such a Page No.: 22 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) cheque in my view would not entail the penal liability as envisaged under Section 138 of the said Act if it is deposited and is dishonoured. Secondly, from the aforesaid discussion, it can also be seen that the cheque in question was not given for an existing debt or legally enforceable liability. (emphasis supplied) In Laxminivas Agarwal Vs. Andhra Semi Conductors Pvt. Ltd. 2006 Cri. L.J 2643 (Andhra Pradesh) accused issued undated cheque by way of security for securing loan of Rs.4.3 lakhs taken by him and it was observed by Hon'ble Andhra Pradesh High Court in para 16 that security cheque cannot be the basis of complaint u/s 138 N.I. Act :
16. In the instant case also this Court found on question of fact that three cheques Exs.P1 to P3 were taken only as security for prompt repayment and those cheques were not issued by the accused towards the discharge of any debt or other liability. In fact, by the date on which the cheques were taken there was no debt or liability borrowed/incurred by the accused. As already observed supra, only cheques were given by the complainant to the accused on the date on which the cheques in dispute were taken from the accused. Therefore, the proved facts of the cited case are similar to the proved facts in the instant case. There is no material to show that the decision in Shri Taher N. Khambati's case (supra) has been overruled by any subsequent decision of this Court or by the Apex Court. I am in entire agreement with the view expressed by the learned Judge of this Court in the cited case. Section 138 of the Act is being misused by the money lenders. This is one of such instances. Admittedly, the complainant herein took pledge of title deeds relating to Ac. 6.00 of land belonging to the accused. It is also not disputed that there was fire accident in the factory of the accused and the entire property of the accused was damaged and the accused made claim before the Insurance Company. It is also not disputed that the accused herein gave reply stating about their financial condition and also promising to repay the same after the insurance claim is settled by the Insurance Company. It is the further case of the accused that though the accused demanded return of the title deeds of the land to enable them to sell the land and discharge the debt due to the complainant, the complainant refused to deliver those title deeds. It is also in the evidence that the complainant filed Criminal case of cheating against the accused and ultimately this Court quashed the said complaint. Thus, the complainant herein knowing fully well that the accused company is in financial distress on account of fire accident and knowing fully well that the accused company had no amount in the bank, filled up the blanks in the cheques as if those cheques were issued by the accused in discharge of the debt on 862000 and 962000 and presented the same for encashment and got those cheques dishonoured and then launched the prosecution under Section 138 Page No.: 23 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) of the Negotiable Instruments Act. By no stretch of imagination it can be said that the Legislature introduced Section 138 of the Negotiable Instruments Act to assist such money lenders to harass the borrowers who were in financial distress. The Legislature intends to punish only those who knowing fully well that they have no amount in the bank and yet issued any cheque in discharge of debt or liability already borrowed/incurred which amounts to cheating and not to punish those who could not discharge the debts borrowed or the liability incurred on account of financial stringency. If Section 138 of the Act can be made applicable to all the debts borrowed or the liability incurred by furnishing blank cheque as security, every borrower under a Negotiable Instrument who fails to repay the same can be prosecuted.
Merely because the signatures in the cheques are admitted, it cannot be said in all cases that the drawer of the said cheque is liable for punishment under Section 138 of the Negotiable Instruments Act in the event of dishonour of those cheques. It is true that presumption is available in favour of the payee under Sections 118 and 139 of the Negotiable Instruments Act. But, admittedly the said presumption is a rebuttal presumption and the borrower is at liberty to prove to the contra, the accused need not necessarily get into the box and state on oath and he is at liberty to point out the documents filed by the complainant to prove the date of issuance of cheque and that there was no debt or liability borrowed/incurred muchless legally enforceable debt or liability on the dates of issue of cheques and that those cheques were issued under different circumstances. Here in the instant case, the documents filed by the complainant himself under Exs.P14 and P15 disclose that by the date of taking of the cheques Exs.P1 to P3 from the accused, there was no debt or liability incurred by the accused towards the complainant. Therefore, the said letters themselves are sufficient to prove the contra to rebut the presumption available under Section 139 of the Negotiable instruments Act. Further the accused during his examination under Section 313 Cr.P.C. filed documents along with his written statement to show that the cheques in question were taken as security for the amount lent by the complainant to the accused. Hence, it cannot be said that the accused failed to prove contra to rebut the presumption available to the complainant under Section 139 of the Act. The decision of this Court in Shri Taher N. Khambati's case (supra) is very much applicable to the facts of this case. (emphasis supplied) In M/s Exports India Vs. State 2007 (4) RCR (Criminal)300 (Delhi High Court) and it was observed by Hon'ble Delhi High Court (Hon'ble Mr. Justice A.K. Sikri, Presently Acting Chief Justice) in para 5, 6 and 7 that dishonour of blank cheque given as security does not make out an offence u/s 138 N.I. Act :
5. After hearing the learned counsel for the petitioner I am of the opinion that this petition warrants to be allowed. It is obvious from the agreement in question that the same was entered into on 11.2.1999 between M/s. Bumpi Page No.: 24 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) Udyog and the petitioner No. 1 and this agreement specifically records giving of blank cheques bearing No. 154832 and 154833 to M/s. Bumpi Udyog. It is clear that the blank cheque was given as a security of the agency agreement and it is nowhere stated that there is any violation of the terms and conditions of the said agreement. The case made out in the complaint is that certain dues were payable by the petitioner No. 1 to the complainant and in discharge of the said liability the cheque in question was issued as is clear from the following averments made in para 5 of the complaint, which reads as under :
"5. That consequently to discharge their liability qua complainant, accused No. 2 handed over a cheque bearing No. 154832 dated 24.04.2000 for Rs. 4,78,807/ drawn on Dena Bank, Bhawanipara, Calcutta700025 in favour of M/s. Bumpy Udyog. The cheque has been signed by accused No. 3 as partner of accused No. 1."
6. The aforesaid averments are clearly false inasmuch as it was a blank cheque given at the time of signing of the agency agreement. It may be noted that the complainant before filing the complaint had given the legal notice dated 22.5.2000 and reply to the said notice was given pointing out the aforesaid facts but in the complaint, the complainant has not at all mentioned about the said reply nor filed the same as a document along with the complaint and has, therefore, suppressed these facts as well.
7. In M/s. Balaji Sea Foods Exports (India) Ltd. v. Mac Industries Ltd., 1999(1) RCR(Criminal) 683 (Madras), the Madras High Court in identical circumstances dismissed the complaint as not maintainable which was based on undated cheque given at the time of execution of the agreement holding that there was no debt or liability when the cheque was handed over to the drawee and, therefore, the complaint could not be maintainable. This petition accordingly succeeds. Summoning order is quashed and the complaint filed by the respondent No. 2 is dismissed. (emphasis supplied) In Sam Daniel Vs. John 2005 Comp Case 17 (Madras High Court) and it was observed by Hon'ble Madras High Court in para 9 and 10 that dishonour of cheque given as collateral security does not make out an offence u/s 138 N.I. Act :
9. Strict liability under Section 138 can be enforced only when the cheque is issued in discharge of any legally enforceable debt or other liability, partly or wholly. Where a cheque is issued not for the purpose of discharge of any debt or other liability, return of such cheque unpaid will not meet with the penal consequences and the maker of the cheque shall not, therefore, be liable for prosecution.
10. The Explanation to Section 138 provides that a debt or liability under this Page No.: 25 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) section means only a legally enforceable debt or other liability. In common parlance, a debt is something owed to another, a liability, an obligation, a chose in action, which is capable of being assigned by creditor to some other person. A debt due means that a particular liability is in existence. Thus in cases for an offence of dishonour of cheque, it would be relevant to examine the materials/evidence as to whether there is a "debt payable" and whether the cheque was drawn for that dischargeable debt. While there may be a debt payable in existence, that alone is not sufficient to prove that the cheque was drawn in discharge of that amount. Where the accused raised the point that the cheque in question was not intended to be in appropriation of the debt or to be used for a discharge of the debt, but was issued only as a collateral safeguard, there cannot be presumption under Section 138 of the Negotiable Instruments Act. (emphasis supplied) In K. Narayana Nayak Vs. M. Shivarama Shetty 2009 (5) RCR (Criminal) 207 (Karnataka High Court) it was observed by Hon'ble Karnataka High Court in para 18 and 19 that dishonour of cheque given as security does not make out an offence u/s 138 N.I. Act :
18. According to the complaint, the appellant advanced the loan on the condition that he should give collateral security and postdated cheque putting the probable date on the cheque. The decisions reported in 1993 Cri LJ 2359, II 1995 BC 506 Bombay and II (1992) BC 218 on which reliance is placed by the Court below says that issue of postdated cheque has to be treated as drawn on date it is delivered and not on the date it bears. Further, according to Section 138 of the NI Act the cheque has to be presented to the bank within a period of six months from the date on which it is drawn. If there was any agreement to repay the amount after two years with interest at 10% and if the cheque was issued after two years, the cheque amount would have been more than one lakh. Moreover the complaint reveals that the loan was advanced on condition that the respondentaccused should give a postdated cheque. That means the accused had issued the cheque on 1661996. In that view of the matter, it is clear that the cheque issued by the respondent to appellant is only as a security and not for discharge of any existing debt, as on the date of issuance of the said cheque.
19. So far as the presumption as to issuance of the cheque for consideration and in discharge of debt, the respondentaccused need not disprove the appellant's case in its entirety. He can discharge his burden on the basis of preponderance of probabilities through direct or circumstantial evidence, for which he can also rely on the evidence adduced by the complainant. The respondent in his evidence has stated that he had not taken any loan from the appellant to tide over his financial difficulties by pledging the shares that the amount shown in Ex.P.2 is part of the sale consideration of shares and as the price of the shares crashed subsequently, the appellant was unwilling Page No.: 26 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) either to transfer them or sell them and therefore fillings up the blank cheque after two years he has filed this case. There is evidence on record to point out handing over of share certificates. Thus, the accusedrespondent has discharged the initial onus of proof. Considering the case on factual basis, I find that the appellant has not satisfactorily discharged the burden of proof. In this view of the matter, I need not find it necessary to go into the bye laws relating to the dealings in the stock exchange. Nonproduction of the pass book by the appellant in relation to the amount lent by him to the respondent through cheques, is fatal to the case of the complainant/appellant. As such, the appellant has failed to discharge his burden by producing documentary evidence before the Court below. Hence, viewed from any angle. I do not find any good reasons to interfere with the order of acquittal passed by the Court below.
In Punjab State Coop. Supply & Mkt. Federation Ltd. v. M/s Goyal Rice & Oil Mills, (P&H) 2009(4) R.C.R.(Criminal) 612 PUNJAB AND HARYANA HIGH COURT three cheques were issued by accused by way of future liability which may arise on supply of goods by complainant to accused and it was observed by Hon'ble Punjab and Haryana High Court that dishonour of such cheques given as security do not make out an offence u/s 138 N.I. Act.
In Sreenivasan v. State of Kerala, (Kerala) 2000(1) R.C.R. (Criminal) 323 it was observed by Hon'ble Kerala High Court in para 3 that dishonour of cheque given as security does not make out an offence u/s 138 N.I. Act :
3. A comparative reading of the principle laid down by the Andhra Pradesh High Court and the mandatory provisions laid down in Sec. 138 of the Negotiable Instruments Act is crystal clear that when a cheque has been issued as a security, no complaint will lie under Sec. 138 of the Negotiable Instruments Act. Yet another infirmity is found in the case, viz.
that the averment in the complaint would be that the cheque was issued only by the petitioner. On the other hand, a notice issued by the second respondent to the petitioner, Annexure II and III, would disclose that the cheque was issued by the petitioner along with two other persons, viz. Ashok and Kamashi. In these circumstances, as rightly pointed out by the learned counsel, I find no merit on the side of the second respondent to launch a complaint under Sec. 138 of the Negotiable Instruments Act. Therefore, no purpose will be served by permitting the Magistrate to proceed with the criminal prosecution. Therefore, it can be rightly interfered by this court under Sec. 482 of the Criminal Procedure Code. (emphasis supplied) Page No.: 27 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E) In Jitendra Singh Flora v. Ravikant Talwar, (M.P.)(Jabalpur Bench) 2001(2) R.C.R.(Criminal) 75 cheque was issued as security for construction of building and it was observed by Madhya Pradesh High Court that cheques given as security are cheques which are not issued to create any liability and their dishonour does not make out an offence u/s 138 N.I. Act.
From the above mentioned judgments it is clear that no offence under section 138 NI Act is made out against the accused if the cheque in question is a security cheque.
11. CONCLUSION : In view of the above discussions and cited judgments, it is clear that the accused has been able to rebut the presumption u/s 139 N.I. Act. and the complainant has failed to prove the ingredients of offence under section 138 N.I. Act against the accused upon such rebuttal. Accordingly, accused Manohar Lal is Acquitted for the offence u/s 138 N.I. Act.
As per section 437A of the Cr.P.C, as inserted vide the Amendment Act, which came into force on 31.12.2009, the personal bond and the surety bond of the accused as well as surety shall remain intact for a period of six months from today.
File be consigned to Record Room.
ANNOUNCED ON 23.02.2013.
(SAURABH PARTAP SINGH LALER) MM06(East)/KKD/23.02.2013 Certified that this judgment contains 28 pages and each page bears my signatures.
(SAURABH PARTAP SINGH LALER) MM06(East)/KKD/23.02.2013 Page No.: 28 / 28 CC No. 926/07 S.P.S. Laler, MM06 (E)