Delhi District Court
The Federal Bank Ltd vs . on 5 February, 2015
1
IN THE COURT OF SH. BABRU BHAN, METROPOLITAN MAGISTRATE,
(SPL. NI COURT )04 DWARKA COURT, NEW DELHI
The Federal Bank Ltd.
Vs.
M/s Golden Power Products and Ors.
C.C. No.3053/14 U/s 138 N.I. Act
JUDGMENT
a) Date of commission of 18.10.2004
offence:
b) Name of Complainant The Federal Bank Ltd. through its
authorized representative Sh. Joseph
Paul.
c) Name of the accused and (1) M/s Golden Power Products and
Address: Ors., 404, Skipper Corner, 88, Nehru
Place, New Delhi110019.
(2) Vipin Parwanda, S/o Sh. Ram
Avtar, R/o 139, PocketA8, Kalkaji
Extn., New Delhi.
(3) Avinash Lal (proceedings
quashed)
d) Offence complained of: U/s 138 N.I. Act
e) Plea of accused: Pleaded not guilty
f) Final order: Convicted
g) Date of order: 05.02.2015
h) Date of institution of case: 18.10.2004
i) Date of decision of case: 05.02.2015
C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 1 of 13 2 Brief facts and reasons for decision of the case:
1. The complainant is a Scheduled bank. Accused no.1 is a Pvt. Ltd.
Company and accused no.2 and 3 are its directors. It is alleged in the complaint that accused no.2 and 3 have issued the cheque in question and they are directly involved in the transaction connected with issuance of impugned cheque.
2. One M/s Secos India Pvt. Ltd. approached the complainant bank for discounting of some cheques on 04.03.2004. The cheques in question bearing no. '732558' dated 01.03.2004 for Rs.6.50 lacs & '732559' dated 01.03.2004 for Rs.3.25 lacs both drawn on UCO Bank, Village Ogli (Kala Amb), Dist. Sirmour, Himachal Pradesh (Ex.CW1/2 & Ex.CW1/3) were allegedly issued by accused no.1 company in favour of the Secos India Pvt. Ltd.. Cheques bears the signatures of accused no.2, i.e., authorized signatory. The cheques were discounted by the complainant bank and the amount of Rs.9.75 lacs was disbursed in favour of the Secos India Pvt. Ltd. After the discounting, the complainant bank stepped into the shoes of the beneficiary.
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3. The cheques were deposited by the complainant bank for encashment but same were returned unpaid on 03.08.2004 for the reasons 'insufficient funds' (Memo Ex.CW1/4 & Ex.CW1/6). The complainant received the intimation regarding the same on 11.08.2004, Thereafter, the complainant demanded the cheque amount via legal notices both dated 09.09.2004 (Ex.CW1/8 & Ex.CW1/9). The legal demand notices were dispatched via registered post and courier. (Courier receipt and postal receipts are Ex.CW1/10 to Ex.CW1/21). Despite service, the payment was not made good within the statutory period. Hence, this complaint.
4. On receipt of complainant, the accused persons were summoned to face the trial. I may note that the proceedings against accused no.3 were quashed by Hon'ble High Court of Delhi vide order dated 12.07.2006.
5. During the complainant's evidence, Sh. Joseph Paul, Manager Administration was examined as CW1. He filed his evidence by way of an C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 3 of 13 4 affidavit Ex.CW1/A. The power of attorney is Ex.CW1/B. In the course of cross examination, the CW1 has also filed the request for discounting made by Secos India Pvt. Ltd. to the complainant bank (Ex.CW1/DA) and the account opening form of Secos India Pvt. Ltd. alongwith other documents {Ex.CW1/DB (colly.)}.
6. Sh. Devender Kumar, LDC, DRT examined as CW2. He filed the records of an application titled 'Federal Bank Ltd. Vs. Secos India Pvt. Ltd.' filed by the complainant with DRT.
7. Thereafter, the accused was confronted with the entire incriminating evidence under the mandate of section 313 CrPC. During the statement, accused admitted his signatures on the impugned cheque but explained that employee of his company in collusion with the complainant bank had misused these cheques. He has also denied any liability of the accused company towards the complainant or anyone. The receipt of legal demand notice was also denied.
C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 4 of 13 5
8. During the defence evidence, Kashmiri Lal Bhola, Director of Secos India Pvt. Ltd. examined as DW1. Pradeep Dutta as DW2, Sh. Naveen Jain as DW3 and accused no.2 Vipin Kumar Parwanda as DW4.
9. DW1 deposed that he was one of the directors of M/s Secos India Pvt. Ltd. He denied any business dealings with M/s Golden Power Products Ltd. within his knowledge. He admitted that M/s Secos India Pvt. Ltd. was having a bank account with Federal Bank. He also stated that other directors of the company including accused Vipin Parwanda used to assign work to him. He admitted that a resolution was passed by his company in his favour to operate its account with Federal Bank. He also admitted that impugned cheque Ex.CW1/2 & Ex.CW1/3 were issued by the accused company, i.e., Golden Power Product Ltd. in favour of Secos India Pvt. Ltd. He further deposed that he was one of the directors of the company at the time of getting the impugned cheque discounted from the Federal Bank. He identified the signatures of Mr. Pradeep Dutta on document Ex.CW1/DA, i.e., request of his company made to Federal Bank for purchasing the impugned cheques. He deposed that he and Mr. Vipin Parwanda, accused no.2 were authorized to operate the accused with Federal Bank.
C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 5 of 13 6
10. DW2 deposed that he was not the functional director of M/s Secos India Pvt. Ltd. When confronted with the signatures on the request letter Ex.CW1/DA, he admitted the same. He explained that document was signed on the pretext that the signatures of other directors also have to be taken for discounting. He denied the suggestion that document Ex.CW1/DA was signed by him with knowledge of discounting.
11. DW3 Naveen Jain stated that he was director in Secos India Ltd. and he was not aware that this company was having any business dealings with the accused company. He also stated that accused no.2 was director in the Secos India Pvt. Ltd.
12. I have heard the arguments and carefully perused the records. Now, I proceed to consider that whether the accused no.1 and 2 are liable for the offence u/s.138 N.I. Act or not.
C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 6 of 13 7
13. Section 118 & 139 of N.I. Act inter alia provides that until the contrary is proved, it shall be presumed that every negotiable instrument was made or drawn for consideration and that the holder of a cheque received the cheque for the discharge, in whole or in part or any other debt or liability. The burden to rebut these presumptions lies upon the accused.
14. Accused no.2 when deposed as DW4 u/s.315 CrPC, he admitted that he was director of accused no.1 company. He also admitted his signatures on the cheques in question Ex.CW1/2 & Ex.CW1/3.
15. During the statement u/s.313 CrPC, accused explained that though the impugned cheques bear his signatures but same were never issued in discharge of liability towards the complainant or anyone. He stated that the same were misused by employee of his company in collusion with the complainant bank. Similar version was reiterated by him during his statement as DW3 wherein he deposed that the cheques were never issued to M/s Secos India Pvt. Ltd. or anyone else. It was stated to be C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 7 of 13 8 misused by some of his employee in collusion with some staff of M/s Secos India Pvt. Ltd..
16. There are three complaints against M/s Golden Power Products pending in this court wherein various cheques issued by the accused no.2 on behalf of the accused no.1 are used in the similar manner. The accused no.2 has admitted during his cross examination that he has not lodged any police complaint regarding the manipulation and misuse of his cheques.
17. Despite the litigation, which the accused no. 2 claimed to have been ensued by misusing the impugned cheques, the accused no.2 has admittedly not lodged any police complaint regarding the fraud and misuse of his cheques. Accused no.2 is a director of a Pvt. Ltd. Company and he is M.B.A. by qualification. He can be expected to be well aware of his legal rights, but surprising enough, he is silently facing this litigation alongwith other cases since 2004. It is very unusual that despite his cheques were misused by some of his employee in connivance with some employee of the complainant bank or of Secos India Pvt. Ltd., he faced C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 8 of 13 9 this exhausting litigation and did not even cared to lodge any police complaint against anyone.
18. This unusual conduct of the accused in not lodging any complainant to police or any other authority raise a doubt on his contention that his cheques were misused by his employee in connivance of the officials of the complainant bank or Secos India Pvt. Ltd.
19. Moreover, one cheque can be misused, it is possible. But there are three complainants against the accused where his cheques are discounted by the complainant bank at behest of three different firms/companies. How these three firms got the cheques of the accused company, same is not explained by the accused.
20. It is apparent that it is the complainant bank who has been cheated by the accused company in connivance with other associate firms. C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 9 of 13 10
21. Next contention raised by the accused is that he had no business dealings with M/s Secos India Pvt. Ltd so the question of issuance of cheques in its favour doesn't arise.
22. DW1 admitted in his cross examination that accused no.2 was also one of the directors in Secos India Pvt. Ltd. DW2 & DW3 also stated the same fact. This fact of directorship is not disputed by the accused no.2. Since the accused no.2 was director with Secos India Pvt. Ltd. also, it is apparent that accused company was having business relations and dealings with the same.
23. DW1 has stated M/s Secos India Pvt. Ltd. was having a current account with the complainant bank. The Secos India Pvt. Ltd. has made a request of discounting the impugned cheques via a letter Ex.CW1/DA. The signatures upon this document are admitted by Pradeep Dutta, another director in Secos India Pvt. Ltd. His explanation that the document was signed blank is not sufficient to create a doubt on its genuineness. Thus, it is proved that Secos India Ltd. had requested the complainant bank for discounting of the impugned cheques. The amount C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 10 of 13 11 was also disbursed in its favour on 04.03.2004 as proved by statement of account Ex.CW1/23.
24. An endorsement in this regard is also mentioned on the cheques in question as 'CP3346' & 'CP3347'. It has been explained by CW1 that it was the Cheque Purchase Number and thereafter the amount was disbursed in the account no.'4107' of M/s Secos India Pvt. Ltd.. The disbursal has already been proved vide document Ex.CW1/23.
25. Since the complainant had purchased the cheques from Secos India Pvt. Ltd. therefore, it stepped into the shoes of the payee and became the holder in due course.
26. A presumption u/s.118(g) N.I. Act arose in favour of the complainant and the onus was upon the accused to rebut the same. However, the accused failed to probablise any fraud or offence through which the cheques were obtained from him. Accordingly, the presumption gone unrebutted.
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27. The dishonour of cheque in question has been proved by the cheque returning memo (Ex.CW1/4 & Ex.CW1/6).
28. The legal demand notices Ex.CW1/8 & Ex.CW1/9 were sent to the accused on 09.09.2004 & 10.09.2004 by registered post and courier. The postal receipts are filed on record as Ex.CW1/10 to Ex.CW1/21. The correctness of address mentioned on the legal demand notice has not been disputed. Moreover the accused has mentioned the same address in the bail bond furnished before this court. Thus, the service of legal demand notice can be safely presumed under the mandate of section 27 of the General Clauses Act.
29. The conclusion of the above discussions is that the M/s Secos India Pvt. Ltd. had approached the complainant bank for discounting of cheques in question. Same was done by the complainant bank. The accused had a golden opportunity to explain that how the impugned cheque came into the possession of M/s Secos India Pvt. Ltd. but he simply walked away by saying that the cheque was misused by some C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 12 of 13 13 employee of his company in connivance either with M/s Secos India Pvt. Ltd. or some staff of the complainant bank. His explanation is apparently not satisfactory because it is proved on record that many other cheques issued by the accused company got discounted by other firms / companies from the complainant bank in similar manner. The apparent real story is that complainant bank has been deceived by the accused company with connivance with other associate companies/firms.
30. All the ingredients of offence u/s 138 NI Act are proved beyond all reasonable doubts.
31. Accused no.1 & 2 stands convicted accordingly. Copy of judgment be supplied to the accused.
(Announced in the open court on 05.02.2015) This Judgment contains 13 pages.
and each paper is signed by me.
(BABRU BHAN) METROPOLITAN MAGISTRATE DWARKA COURTS /NEW DELHI C.C. No.3053/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 13 of 13