Delhi District Court
M/S Raj Kumar & Company vs Sandeep Saluja Cc No.3559/10 on 15 February, 2012
IN THE COURT OF SH. RAKESH KUMAR SINGH:
METROPOLITAN MEGISTRATE (NI ACT)-1, CENTRAL:
ROOM NO.-42, TIS HAZARI COURT COMPLEX, DELHI
M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10
15.02.2012
JUDGMENT
a. Serial No. of the case
3559/2010
b. Date of the commission of the offence
10.04.2006
c. Name of the complainant
M/s Raj Kumar & Company.
d. Name of accused person and his parentage and residence
Sandeep Saluja, S/o Sh. Satish Saluja , Prop of Sidhant Traders R/o H. No.4C/10 First Floor, Old Rajinder Nagar, Delhi.
e. Offence complained of or proved Dishonor of cheque for insufficient funds punishable under Section-138 NI Act.
f. Plea of the accused and his examination (if any) Not guilty. Cheques given as advance and security. No liability.
g. Final Order
Held guilty. Convicted.
h. Date of such order
15.02.2012
i. Brief reasons:
The present case being tried as summons trial at all point of time deserves a judgment under Section-355 Cr. P. C. Parties have been heard.
2. Two complaint cases have been filed by the complainant against the accused. One on the basis of one cheque of Rs.
M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 1 11,672/- and the other on the basis of 10 cheques. Complainant through its partner filed both the complaints alleging liability on the accused towards the supplied goods. The instant case is based upon 10cheques. The said cheques when dishonored for reason insufficient funds, the complainant sent a legal demand notice but the accused failed to pay the amount. Hence the instant complaint. Manoj Kumar parter of the complainant has filed his affidavit to establish the ingredients of Section-138 NI Act. Copy of partnership deed is Ex.CW1/1, Bills Ex.CW1/2 to 8, Cheques Ex.CW1/9 to 18, returning memos Ex. CW1/19 to 28, legal demand notice Ex. CW1/29, receipt of registered post Ex CW1/30, UPC Ex. CW1/31.
When notice was framed against the accused, he pleaded not guilty and claimed trial.
Partner of the complainant has been cross examined. Primarily partner has been cross examined on the point of registration of the complainant firm. Suggestion in respect of non delivery of goods had been denied by the complainant. Complainant also denied the suggestion about the security cheque. Complainant, however, accepted that bills do not bear the signature of the accused. However, he said that accused used to come with 1 or 2 persons to collect goods and that signatures of such persons were obtained on such bills to whom delivery of goods was made.
In his examination under section 313 Cr. P. C accused admitted almost entire case of the complainant. He admitted having purchased the goods vide bills. He further admitted the issuance of cheques in discharge of legally recoverable debt. He further admitted the dishonour. He also admitted the receiving of legal demand notice and non payment despite service of notice. Accused, however, taken a defence that the cheque was presented without his confirmation and, therefore, there was no liability against him.
Opportunity was given to the accused to lead defence evidence. However, he chose not to lead any defence evidence and he closed the defence vide his statement dated 25.02.2010. Subsequently, however, accused moved an application under section 311 Cr. P. C to lead defence evidence which was eventually allowed on 24.05.2010. Accused examined himself in defence. He has stated that he only received the goods in respect of bill Exh.CW1/2 and Exh.CW1/5. He further stated that he has already paid the amount of the said bill Exh.CW1/2. He further claimed that some cheques were issued in advance and some cheques were issued as blank but complainant never returned the cheques despite demands.
The accused has been cross-examined. He admits that he has not placed any cash receipt in respect of the payment of bill Exh.CW1/2. He, however, tried to explain that since complainant was not issuing any receipt, he was not having any such receipt. Accused, further admits that he never demanded the return of cheques in writing. He further admits that he is also facing trial for offences U/s 138 NI Act in other courts.
Though the accused claimed that he demanded the return of the cheques from the complainant, he never provided any details in respect of such alleged demands of return of cheques. Accused has not provided anything in this respect. At least he could have provided the dates of demand, mode & manner of demand. But he chose not to do so. Even as per his own admission, there was no written demands made by him. In such circumstances, a mere statement of accused cannot suffice the matter.
M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 2 Accused claimed to have paid the amount of bill Exh.CW1/2, however, he did not produce any cash receipt. If he was issuing cheques in advance, there was no necessity to pay the amount of one bill in cash. Moreover, once a person pay the amount in cash, it is natural that he will demand the return of the advance cheque or security cheque after the payment. It is highly unbelievable that a businessman will not take necessary steps to obtain his cheques from the other person. A cheque is as much valuable as any cash amount. Any prudent person will initiate action or legal proceedings or lodge any criminal complaint in such circumstances when he does not receive his blank cheques or advance cheques despite demand. The conduct of the accused cannot be treated as of a conduct of a prudent businessman. Contention in respect of the cash payment of one bill and demand for the return of the cheques cannot be accepted without any supporting proof which the accused has failed to bring on record.
The accused in Para-2 of his cross-examination denied almost all the suggestions given by the complainant (see order dated 09.12.2011 by which some portion of para-2 of the cross examination was ractified on application). Accused failed to provide any support to his denial of suggestions.
The only defence of the accused as taken in the statement U/s 313 Cr.P.C. is that complainant deposited the cheques without confirmation. However, nothing has been brought by the accused on record to establish this fact or even any requirement of confirmation.
I consider that law does not require any confirmation from the drawer before presentation of cheque.
No other defence was taken by the accused in his statement U/s 313 Cr.P.C. Instead, he had admitted entire case of the complainant as indicated above. Accused cannot be allowed to take a different route and that too without any support.
Non reply of legal demand notice is itself going against the accused.
Ld. Counsel for the accused has raised certain legal issues. However I consider that such legal issues cannot help the accused.
Non registration of complainant firm is immaterial for the purpose of Section-138 NI Act as held by Hon'ble High Court of Delhi in B.S. Bakhshi Vs. State 134 (2006) DLT 707. Therefore, reliance placed upon judgment of Hon'ble Andhra Pradesh High Court (2000 CRI.LJ 2386) cannot help the accused.
So far as the contention that the cheques were not presented on regular basis is concerned, I consider that there is no prohibition in law which prohibits any payee from presenting all the cheques on one day. The only limitation is that cheque must be presented within its validity as required under Proviso-a to Section-138 NI Act.
M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 3 There is further no requirement that drawer of the cheque should give any undertaking or assurance for encashment of cheque and that the same should be mentioned in the complaint. The contention of the accused in this respect deserves a summary rejection.
The contention on the basis of Section-219 Cr.P.C. is also misconceived. Section-219 Cr.P.C. applies to different offences. The offence U/s 138 NI Act becomes complete only after failure of the drawer in paying the amount after receiving of legal demand notice. Complainant has sent one legal demand notice for ten cheques and, therefore, only one cause of action is available in respect of ten cheques (see Sharma Contracts India Pvt. Ltd. vs State CRL.M.C. No. 2351/2011 decided on 17.01.2012 by Hon'ble High Court of Delhi).
There are mandatory presumptions of law which even extends to the existence of liability and, therefore, complainant is not required to prove the liability.
Unless the accused passes the hurdle of mandatory presumptions of law, he cannot escape from the criminal liability. So far as difference in total bill amount and total cheques amount is concerned, I consider that this can also not help the accused. The cheques amount is less than the bills amount. It is not a civil proceeding for recovery of amount of bills. The proceeding is based upon dishonoured cheques and accused has failed to rebut the liability of cheque amount for which mandatory presumptions of law are in favour of the complainant.
3. Mandatory presumptions of law are in favour of the complainant. The presumption even extends to the existence of legally enforceable debt or liability. Unless the accused passes the hurdle of mandatory presumptions of law, nothing more is required from the complainant.
Accused failed to rebut mandatory presumptions of law (see subsequent discussion on legal issues) arising in favour of the complainant.
The complaint has to succeed.
Discussion on Legal provisions:
4. There are some mandatory presumptions of law arising in favour of the complainant. The same may be summarized as under:
4.1 Section-118 of Negotiable Instruments Act reads as under:
"118. Presumptions as to negotiable instruments.-
Until the contrary is proved, the following presumptions shall be made:
M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 4
(a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;"
Presumptions are:
i. Cheque was drawn for consideration;
ii. Cheque was transferred for consideration;
iii. Cheque was accepted for consideration.
4.2. Section-139 of Negotiable Instruments Act reads as under:
"139. Presumption in favour of holder.- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt, or other liability."
Presumptions are:
i. Holder of the cheque has lawfully received the cheque, meaning thereby that the holder was in lawful possession of the cheque;
ii. The cheque was given in discharge of any debt or liability;
iii. Legally enforceable debt or liability was in existence at the time of issuance of the
cheque;
(contrary view has been overruled by the three judges bench of Hon'ble Supreme Court in Rangappa vs S. Mohan (2010) 11 SCC 441) with the observation:
"In light of these extracts, we are in agreement with the respondent-claimant 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. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein.") M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 5 iv. The cheque was of the nature as described in section-138;
v. The cheque was drawn by the person who was maintaining the account pertaining to the cheque;
vi. Amount of money mentioned in the cheque was intended to be given;
4.3. Section-146 of Negotiable Instruments Act reads as under:
"146. Bank's slip prima facie evidence of certain facts.-
The court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved."
Presumptions are:
i. The cheque has been dishonoured;
ii. The cheque has been so dishonoured for the reason mentioned in the memo.
4.4. Section-27, General Clauses Act reads as under:
"27. Meaning of service by post -
Where any (Central Act) or Regulation made after the commencement of this Act authorizes of requires any document to be served by post, where the expression "serve" or either of the expressions "give" or "send" or any other expression in used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing pre-paying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
Presumptions are:
i. Letter has been served upon the accused;
ii. The same is served within the normal reasonable time;
M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 6
iii. The content of the letter was within the knowledge of the accused. (see a three
judges bench decision of Hon'ble Supreme Court if India in Harcharan Singh vs Shiv Rani & Ors. AIR 1981 SC 1248).
In this respect, a three judges bench of Hon'ble Supreme Court in C.C. Alavi Haji v. Palapetty Muhammed and Another (2007) 6 SCC 555 has held that:
"17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskarans case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act.
18. In the instant case, the averment made in the complaint in this regard is: Though the complainant issued lawyers notice intimating the dishonour of cheque and demanded payment on 4.8.2001, the same was returned on 10.8.2001 saying that the accused was out of station. True, there was no averment to the effect that the notice was sent at the correct address of the drawer of the cheque by registered post acknowledgment due. But the returned envelope was annexed to the complaint and it thus, formed a part of the complaint which showed that the notice was sent by registered post acknowledgment due to the correct address and was returned with an endorsement that the addressee was abroad. We are of the view that on facts in hand the requirements of Section 138 of the Act had been sufficiently complied with and the decision of the High Court does not call for interference."
M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 7 On mere explanation, denial and minor inconsistencies:
5. Without any doubt, in a criminal case, the prosecution has to stand on its own lags. No blemishes in the story of the accused will give a right to the complainant to claim that he has establish his case. Even accused can always rely upon the material and circumstances brought on record by the complainant. However, there must be something more than a bare denial or a mere explanation.
5.1. It is a settled law that a mere denial of passing off consideration is not sufficient. In Bharat Barrel & Drum Manufacturing Company v. Amin Chand Pyarelal, (1993) 3 SCC 35 (Para. 12) it has been held that:
"Upon consideration of various judgments as noted herein above, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbably or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that it did not exist."
M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 8 5.2. In the present case, no such circumstances have been brought on record which suggest the inference that consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that it did not exist.
5.3. Further, a mere explanation given by the accused is also not sufficient. In case titled V S Yadav vs Reena CrLA No. 1136/2010 decided on 21.09.2010, Hon'ble High Court of Delhi has observed that:
"3. The appellant had taken a stand that no reply to the notice of legal demand was sent by the respondent, instead, envelopes with blank sheets in it were sent by the respondent. In her examination under Section 281 Cr. P.C. she did not deny issuance of cheques, but, took a defence that cheque were issued as security for seeking loan but no loan was advanced and the cheques were therefore without consideration. The learned MM observed that conviction under Section 138 of N.I. Act cannot be made acting on evidence of complainant and considering the presumption under Section 139 of N.I. Act. The complainant has to prove beyond reasonable doubt the debt or liability of the accused. Learned MM observed that complainant had not specified the date of giving loan and a reasonable man would remember the date of giving substantial sum of money as loan to other and this blissful forgetness of the date by the complainant raised doubt about the liability of the accused, more so, in view of the stand taken by the accused that the cheques were issued as security and the same were never returned.
*******
5. It must be borne in mind that the statement of accused under Section 281 Cr. P.C. or under Section 313 Cr. P.C. is not the evidence of the accused and it cannot be read as part of evidence. The accused has an option to examine himself as a witness. Where the accused does not examine himself as a witness, his statement under Section 281 Cr. P.C. or 313 Cr. P.C. cannot be read as evidence of the accused and it has to be looked into only as an explanation of the incriminating circumstance and not as evidence. There is no presumption of law that explanation given by the accused was truthful. In the present case, the accused in his statement stated that he had given cheques as security. If the accused wanted to prove this, he was supposed to appear in the witness box and testify and get himself subjected to cross examination. His explanation that he had the cheques as security for taking loan from the complainant but no loan was given should not have been considered by the Trial Court as his evidence and this was liable to be rejected since the accused did not appear in the witness box to dispel the presumption that the cheques were issued as security. Mere suggestion to the witness that cheques were issued as security or mere explanation M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 9 given in the statement of accused under Section 281 Cr. P.C., that the cheques were issued as security, does not amount to proof. Moreover, the Trial Court seemed to be obsessed with idea of proof beyond reasonable doubt forgetting that offence under Section 138 of N.I. Act was a technical offence and the complainant is only supposed to prove that the cheques issued by the respondent were dishonoured, his statement that cheques were issued against liability or debt is sufficient proof of the debt or liability and the onus shifts to the respondent/ accused to show the circumstances under which the cheques came to be issued and this could be proved by the respondent only by way of evidence and not by leading no evidence.
*******
7..............The Trial Court in this case turned a blind eye to the fact that every accused facing trial, whether under Section 138 of N.I. Act or under any penal law, when charged with the offence, pleads not guilty and takes a stand that he has not committed the offence. Even in the cases where loan is taken from a bank and the cheques issued to the bank stand dishonoured, the stand taken is same. Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised under Section 139 of N.I. Act. If mere statement under Section 313 Cr. P.C. or under Section 281 Cr. P.C. of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant/ prosecution, then every accused has to be acquitted. But, it is not the law. In order to rebut the presumption under Section 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman/prudent person entering into a contract he could not have rebutted the presumption u/s 139 N.I. Act. If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case."
5.4. In Rangappa(supra), the case of the accused was that of a lost cheque. However initially, the High Court dealing with matter had held that:
'6. Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant. The presumption referred to in Section 139 of the N.I. Act is a M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 10 mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. What is required to be established by the accused in order to rebut the presumption is different from each case under given circumstances. But the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the Court. The defence raised by the accused was that a blank cheque was lost by him, which was made use of by the complainant. Unless this barrier is crossed by the accused, the other defence raised by him whether the cheque was issued towards the hand loan or towards the amount spent by the complainant need not be considered. ...' The judgment of conviction upon the above basis recorded by the Hon'ble High Court was finally upheld by the Hon'ble Supreme Court in Rangappa (supra).
It was further held in Rangappa (supra) as under:
"Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the 'stop payment' instructions to his bank. Furthermore, the instructions to 'stop payment' had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant- accused was not able to contest the existence of a legally enforceable debt or liability. The fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction-related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction- expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant. "
M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 11 On requirement to establish the fact within special knowledge:
5.5. In Rajesh Agarwal vs State decided on 28.07.2010, Hon'ble High Court of Delhi has observed that:
"9. An argument is raised that the accused, under Article 21 of Constitution of India, has a right of silence in a criminal trial and therefore he cannot be forced to disclose his defence. This argument is misconceived in view of Section 106 of Indian Evidence Act. Since an offence under section 138 of Negotiable Instrument Act is technical in nature and defence which an accused can take are inbuilt, like the cheque was given without consideration, the accused was not Director at that time, accused was a sleeping partner or a sleeping Director, cheque was given as a security etc. etc., the onus of proving these defences is on the accused alone, in view of section 106 of Evidence Act. Since the mandate of Legislature is trial of such cases in a summary manner, the evidence already given by the complainant by way of affidavit is sufficient proof of the offence and this evidence is not required to be given again in terms of section 145(1) of N.I. Act and has to be read during the trial. The witnesses i.e. the complainant or other witnesses can be recalled only when accused makes an application and this application must disclose the reason why accused wants to recall the witnesses and on what point witness is to be cross examined. One must not forget that the offence under section 138 of N.I. Act is not of the kind of offence as in IPC where the State prosecutes a person for offence against the society. The offence under section 138 of N.I. Act is an offence in the personal nature of the complainant and it is an offence made under N.I. Act so that the trust in commercial transactions is not destroyed because of the dishonour of cheques. When it is within the special knowledge of the accused as to why he is not to face trial under section 138 N.I. Act, he alone has to take the plea of defence and burden cannot be shifted to complainant. There is no presumption that even if an accused fails to bring out his defence, he is still to be considered innocent. If an accused has a defence against dishonour of the cheque in question, it is he alone who knows the defence and responsibility of spelling out this defence to the court and then proving this defences is on the accused. I, therefore, consider that the proper procedure to be followed by MM is that soon after summoning, the accused must be asked to disclose his defence & his plea should be recorded. Where an accused takes no defence and simply says "I am innocent", there is no reason for the MM to recall the complainant or witnesses during summary trial and the evidence already given by the complainant has to be considered sufficient and the trial court can ask the accused to lead his evidence in defence on the plea of innocence as the evidence of the complainant is already there. In a summary trial, a complainant or his witness cannot be recalled in the court for cross examination only for the sake of pleasure. Once the complainant has brought forward his case by giving his affidavit about the issuance of cheque, dishonour of M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 12 cheque, issuance of demand notice etc., he can be cross examined only if the accused makes an application to the court as to on what point he wants to cross examine the witness (es) and then only the court shall recall the witness by recording reasons thereto."
On representation of AR of the complainant:
5.6. Hon'ble Supreme Court in M/S. Shankar Finance & ... vs State Of Andhra Pradesh & Ors on 26 June, 2008 has held that:
"10. This Court has always recognized that the power of attorney holder can initiate criminal proceedings on behalf of his Principal. In Ram Chander Prasad Sharma v. State of Bihar and Anr. [AIR 1967 SC 349], the prosecution was commenced in regard to tampering of electric meter seals, with a charge sheet submitted by the police after investigation on a first information report by one Bhattacharya, Mains Superintendent of PatnaElectric Supply Co. (`PES Co.' for short). An objection was raised by the accused that the prosecution wasincompetent as it was not launched by a person competent to do so. The said objection was based on section50 of the Indian Electricity Act, 1910, which provided that no prosecution shall be instituted against anyperson for any offence against that Act or any rule, licence or order thereunder, except at the instance of the Government or an Electric Inspector, or of a person aggrieved by the same. This Court held : "... The P.E.S. Co., however, is a body corporate and must act only through its directors or officers. Here we have the evidence of Ramaswami to the effect that he held a general power of attorney from the P.E.S. Co., and that he was specifically empowered thereunder to act on behalf of P.E.S. Co., in all legal proceedings. The evidence shows that it was at his instance that Bhattacharya launched that first information report and, therefore, it would follow that the law was set in motion by the "person aggrieved". The objection based on Section 50 must, therefore, be held to be untenable."
12. The High Court has referred to the fact that the sworn statement before the learned Magistrate was of the attorney holder of the payee and not by the payee in person. According to the tenor of the order of the High Court, this was also irregular. But we find nothing irregular in such a procedure. It is now well settled that the object of section 200 of the Code in providing for examination of the complainant and his witnesses by the court is to satisfy itself about the existence of a prima facie case against the person accused of the offence and to ensure that such person is not harassed by false and vexatious complaints by issue of process; (See Nirmaljit Singh Hoon v. State of West Bengal - 1973 (3) SCC 753). Where the proprietor of the M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 13 proprietary concern has personal knowledge of the transaction and the proprietor has signed the complaint, he has to be examined under section 200 of the Code. A power of attorney holder of the complainant who does not have personal knowledge, cannot be examined. But where the attorney holder of the complainant is in charge of the business of the payee- complainant and the Attorney holder alone is personally aware of the transactions, and the complaint is signed by the attorney holder on behalf of the payee-complainant, there is no reason why the attorney holder cannot be examined as the complainant. We may, in this connection, refer to the decision of this Court in Janki Vashdeo Bhojwani v. Indusind Bank Ltd. [2005 (2) SCC 217], where the scope of an attorney holder `acting' on behalf of the principal in a civil suit governed by Code of Civil Procedure was examined. This Court observed: "Order 3 Rules 1 and 2 CPC empower the holder of power of attorney to "act" on behalf of the principal. In our view the word "acts" employed in Order 3 Rules 1 and 2 CPC confines only to in respect of "acts" done by them power-of-attorney holder in exercise of power granted by the instrument. The term "acts" would not include deposing in place and instead of the principal. In other words, if the power-of-attorney holder has rendered some "acts" in pursuance of power of attorney, he may depose for the principal in respect of such acts, but he cannot depose for the principal for the acts done by the principal and not by him. Similarly, he cannot depose for the principal in respect of the matter of which only the principal can have a personal knowledge and in respect of which the principal is entitled to be cross-examined."[Emphasis supplied] The principle underlying the said observations will apply to cases under section 138 of the Act. In regard to business transactions of companies, partnerships or proprietary concerns, many a time the authorized agent or attorney holder may be the only person having personal knowledge of the particular transaction; and if the authorized agent or attorney-holder has signed the complaint, it will be absurd to say that he should not be examined under section 200 of the Code, and only the Secretary of the company or the partner of the firm or the proprietor of a concern, who did not have personal knowledge of the transaction, should be examined. Of course, where the cheque is drawn in the name of the proprietor of a proprietary concern, but an employee of such concern (who is not an attorney holder) has knowledge of the transaction, the payee as complainant and the employee who has knowledge of the transaction, may both have to be examined. Be that as it may. In this case we find no infirmity."
Result:
6. I accordingly return a finding of guilt against the accused person.
M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 14
7. The accused Sandeep Saluja is hereby convicted for the offence as punishable under Section-138 NI Act, 1881 charged in the present complaint case.
8. Let the convict be heard on the point of sentence.
9. A copy of this order be placed on the official website of the District Court.
(Rakesh Kumar Singh) MM (NI Act)-01, Central District, Delhi 15.02.2012 M/s Raj Kumar & Company Vs Sandeep Saluja CC No.3559/10 15