Delhi District Court
11. In Smt. Kamla Rani And Ors. vs Texmaco Ltd., Air 2007 Delhi on 28 March, 2013
IN THE COURT OF SH. GAGANDEEP JINDAL,
METROPOLITAN MAGISTRATE (NI ACT)- 12, DWARKA COURTS,
NEW DELHI
M/s HDFC Bank Ltd.
Versus
Suresh Bansal
P.S : I.P. Estate
U/s : 138 Negotiable Instruments Act
1. Serial No./CC No. of the case : 3373/12
2. Name of the complainant : M/s HDFC Bank Ltd.,
Having its office at :
2nd Floor, Express Building,
Bahadur Shah Zafar Marg,
ITO, New Delhi.
3. Date of Institution : 10.12.2010
4. Name of the accused, his : Suresh Bansal,
parentage and residence S/o Late Sh. Ram Kumar,
R/o G-147, Prem Nagar I Kiradi
Delhi-110041
Also at :
Suresh Bansal,
S/o Late Sh. Ram Kumar,
R/o G-147, Prem Nagar I
Delhi-110041
5. Date when judgment was : 28.03.2013
reserved
6. Date when judgment was : 28.03.2013
pronounced
7. Offence complained of and : Offence Under Section 138 of
proved Negotiable Instruments Act
CC No. 3373/12 Page 1 of 10
8. Plea of accused : Accused pleaded not guilty and
claimed trial
9. Final Judgment Acquitted
-:J U D G M E N T:-
1. Vide this judgment, I shall decide the present complaint filed by the complainant M/s HDFC Bank Ltd. Under Section 138 of Negotiable Instruments Act (hereinafter referred to as N.I Act) against the accused Suresh Bansal.
2. Factual matrix of the case is that complainant bank financed a loan to the accused under the loan agreement no. 91511237 (Personal Loan). It is further averred that accused in partial discharge of his liability has issued the cheque bearing no. 809911 dated 30.09.2010 of Rs. 15,296/- drawn on Syndicate Bank, Najafgarh Road, Delhi in favour of the complainant which when presented by the complainant with its banker for encashment was returned unpaid by the Drawee Bank with the returning memo dated 01.10.2010 for the reason "Funds Insufficient". Thereafter, the complainant served a Legal Demand Notice dated 25.10.2010 by Speed Post calling the accused to make the payment of dishonoured cheque. It is further averred that despite service accused failed to make the payment of cheque amount demanded through Legal Notice, thereby committing the offence Under Section 138 of N.I Act for the prosecution of which the present complaint has been filed. ich the present complaint has been filed.
3. After considering the material on record, the cognizance of the offence U/s 138 of N.I Act was taken and accused was summoned on 15.12.2010. The accused appeared in the court on 20.10.2012 and was admitted to bail on 01.11.2012.
CC No. 3373/12 Page 2 of 104. Notice U/s 251 Cr.P.C. was framed against the accused on 15.12.2012. At the time of framing of notice, the accused pleaded not guilty and claimed trial.
5. The complainant has examined Sh. Somesh Sundriyal, Authorized Representative as CW 1. CW 1 has filed his evidence by way of affidavit Ex. CW1/X and relied upon the following documents : - (A) Power of Attorney of the Authorized Representative is exhibited as Ex. CW1/1. (B) Original cheque in question is exhibited as Ex. CW1/2. (C) The cheque returning memo is exhibited as Ex. CW1/3. (D) Office copy of the legal notice is exhibited as Ex. CW1/4. (E) Returned Envelope and Post receipts are exhibited as Ex. CW1/5 (Colly.). (F) Statement of account of the accused is exhibited as Ex. CW1/6. CW 1 was discharged after cross-examination. No other witness has been examined by the complainant and complainant evidence was concluded on 19.03.2013.
6. The accused was examined U/s 313 Cr.P.C. and all the incriminating evidence were put to the accused. In his statement the accused submitted that he had taken the loan from Centurion Bank of Punjab and had given 14 cheques including cheque in question to a broker.
7. The accused has not led any evidence in his defence.
8. Final Arguments on behalf of the both the parties heard. Complainant has filed the written arguments.
9. From the arguments of both the parties, following questions for consideration has arisen :-
QA. Whether the present complaint has been filed by the authorized person on behalf of the complainant or not.CC No. 3373/12 Page 3 of 10
QB. Whether the accused has issued cheque in question to discharge his liability against the loan taken by him from the complainant or not?
10. Question No. A :
It is argued by Ld. Legal Aid Counsel for the accused that power of attorney Ex. CW1/1 does not give details of Board Resolution by which authority has been conferred on Mr. Aditya Puri. It is submitted that the said attorney does not bear any statement of authentication given by Notary Public, therefore, the presumption under Section 85 of Indian Evidence Act do not attract, and the burden of proving such power of attorney was on the complainant. Before proceeding further it will be relevant to look into law laid down by Hon'ble High Court of Delhi in this regard:
11. In Smt. Kamla Rani And Ors. vs Texmaco Ltd., AIR 2007 Delhi 147, Hon'ble High court of Delhi held that:
"33. Authentication by a notary public is a solemn act performed by the notary public whose duty is to ensure that the executant is the person before him and is identified to his satisfaction. Once a document is authenticated by a notary public, it will be presumed that the document was duly executed and was in order. The use of the expression 'shall presume' shows that the section is mandatory and the court has to presume that all necessary requirements for the proper execution of the power of attorney were duly fulfilled before the notary public. As observed in AIR 1984 363 E.C. & E. Co. Ltd. v. J.E. Works, if 2 conditions are satisfied, firstly the power of attorney being executed before a notary public and secondly it being authenticated by a notary public, a presumption would arise under Section 85 about the executant of the power of attorney."CC No. 3373/12 Page 4 of 10
12. In Birla Dlw Ltd. vs Prem Engineering Works, 77 (1999) DLT 171 Hon'ble High court of Delhi held that:
"8. We have perused the Power of Attorney on record as well as the evidence recorded in support thereof. The original Power of Attorney is stated to be executed by Shri M.D. Poddar in the presence of one Shri G.K. Sureka. It is based on a Resolution of the Board of Directors dated 14.7.1981. Appellant has neither produced on record the Resolution of the Board of Directors which authorised Shri M.D. Poddar to execute the Power of Attorney, nor Shri M.D. Poddar or Shri G.K. Sureka appeared as witnesses to prove the execution of the said Power of Attorney. Mr. Saraogi, on behalf of the plaintiff, in his statement, did not depose anything about either being familiar with the signatures of Shri Poddar or the said Power of Attorney having been executed by Shri Poddar in his presence. The Power of Attorney was routinely tendered in evidence and exhibited. The question that comes up for consideration is whether a presumption of its due execution and validity can be raised under Section 85 of the Indian Evidence Act? A Division Bench of this Court had occasion to consider this aspect in Electric Construction & Equipment Co. Ltd. Vs. Jagjit Works (supra). The Division Bench observed as under :
"It is useful to note that Section 85 raises a presumption about the execution of a POA provided two conditions are satisfied. Firstly, it must be executed before a Notary Public and secondly. It must be authenticated by him . In this case, there is no authentication at all. There is no statement of facts by the Notary Public regarding the manner of execution or the persons executing the document. If reference is made to the judgments cited before us, the contrast is striking. In the case of the City Bank, the authentication made by the Notary Public in New York covers nearly two printed pages of the Report and quotes extensively the circumstances in which the General POA was executed. Similarly, in the case of the National & Grindlays Bank Ltd., the authentication shows that the seal of the Bank was impressed on the POA in the presence of the Notary and the same was the genuine seal of the Bank. Thus, it was the authentication that proved both the execution as well as the due authentication of POA and, therefore, satisfied the test laid down in Sec. 85 of the Evidence Act."CC No. 3373/12 Page 5 of 10
In Syndicate Bank Vs. M/s. S.A. Trading Corpn. & Ors. (supra), a Division Bench of this Court while dealing with the question of proof of Power of Attorney, where presumption under Section 85 of the Evidence Act could not be raised, observed as under :
In case the person who has conferred the Power of Attorney has not got it executed, so as to enable him to raise the presumption which may be raised in terms of Section 85 of the Evidence Act, then he is left with no option, but to prove the same in accordance with law. This is done by proving the resolution of the Board of Directors of the company, which gives its officers power to grant Power of Attorney to persons the company considers worthy of it, and also prove the factual execution of the Power of Attorney by the empowered officer or officers. This proof has to be tendered in Court by proving the passing of the resolution by the company in accordance with sections 193 and 194 of the Companies Act, 1956."
13. In Baker Oil Tools (India) Pvt. Ltd. vs Baker Hughes Ltd. & Anr, RFA No. 583/2004, decided on 03.06.2011, Hon'ble High Court of Delhi held that:
"29. It is well-settled that under section 291 of the Companies Act except where express provision is made that the powers of a company in respect of a particular matter are to be exercised by the company in general meeting, in all other cases the board of directors are entitled to exercise all its powers. Individual directors have such powers only as are vested in them by the memorandum and articles. It is true that ordinarily the court will not unsuit a person on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter. It has far-reaching effects. It often affects the policy and finances of the company. Thus, unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the company. Needless to say such a power can be conferred by the board of directors only by passing a resolution in that regard.....CC No. 3373/12 Page 6 of 10
30. The plaintiff has not placed on record any resolution passed by the company authorising Shri G. Jhajharia to institute the suit. Shri G. Jhajharia did not come forward to make a statement that he was in a position to depose to the facts of the case. In the plaint signed by him, he claims to be a principal officer and director, but there is no evidence on record to indicate that he had the authority to institute the suit. The memorandum and articles of association of the plaintiff company are also not placed on record. Even after the suit was instituted by Shri G. Jhajharia, no resolution was passed by the company ratifying this action. No such decision of the board of directors is placed on record in the present case. The plaintiff has examined Shri Ashok Kumar Jhajharia. He has placed on record, exhibit PW-2/1, which is the resolution of the board of directors reappointing Shri G. Jhajharia as the director but this resolution does not empower Shri G. Jhajharia as a director to institute the present suit. Shri Ashok Kumar Jhajharia has stated that he was handling the day-to-day management of the plaintiff company including the insurance part of it. He, however, does not state that Mr. G. Jhajharia was handling the day-to-day management or was in charge of the insurance claim."
14. From the aforesaid discussion, it is clear that presumption U/s 85 of Indian Evidence Act shall be drawn only when the attorney is executed and authenticated before the Notary Public. In present case, initially complaint is filed by Sh. Gopal Ranga on behalf of the complainant bank, though there is a photo copy of power of attorney on the record in favour of Sh. Gopal Ranga, but no complainant witness has proved the same. For the sake of consideration, the power of attorney in favour of Sh. Gopal Ranga is marked as Mark X. Later on, Sh. Somesh Sundriyal has been substituted as authorised person on behalf of the complainant bank and there is power of attorney Ex. CW1/1 in his favour. There is no text in both attorneys as to authentication by Notary Public, therefore, onus to prove attorney was on complainant. The complainant should have brought board resolution on record or its executor to witness box to prove this document. The complainant has failed to bring on record Board resolution, CC No. 3373/12 Page 7 of 10 power of attorney authorizing Mr. Aditya Puri, details of powers delegated to Mr. Aditya Puri. As the authority and its scope in favor of Mr. Aditya Puri has been shadowed, therefore, the subsequent delegation of power by Mr. Aditya Puri in favour of other employees cannot be said to be proper. I will like to point out that the attorney Mark X of Sh. Gopal Ranga who instituted the compliant, also suffers from the same defects. In these circumstances, the power of attorney Mark X and Ex. CW1/1 are not proved on record and the authority of Mr. Somesh Sundriyal and Mr. Gopal Ranga to institute and prosecute this case suffers from latches.
15. Question No. B :
It is the case of complainant that accused has taken a loan from complainant bank under the loan agreement no. 91511237. But the cheque in question is in favour of the Centurion Bank of Punjab Ltd. Moreover, the accused in his statement U/s 313 Cr. P.C. has categorically stated that he has taken the loan from Centurion Bank of Punjab and he had given 14 cheques including the cheque in question to a broker who might have given the same to Centurion Bank of Punjab. But, there is no explanation on the record given by the complainant that how the cheque in question came in its possession. It shows the callous approach of the complainant during the trial. This court is taking the judicial notice of the fact that the Centurion Bank of Punjab was amalgamated with complainant bank w.e.f. 23.05.2008. CW 1 in his testimony has stated that he do not know in whose presence the cheque in question was given by the accused to the complainant. The cheque in question Ex. CW1/2 has been drawn in name of "Centurion Bank of Punjab Ltd." If the cheque was given to the complainant bank on 30.09.2010 i.e. cheque date, then the complainant has failed to explain why the cheque is drawn in the name of "Centurion Bank of Punjab Ltd" despite the fact that on 30.09.2010 the Centurion CC No. 3373/12 Page 8 of 10 Bank of Punjab Ltd. was not in existence. The back side of cheque also shows the words "SPDCMUM" written on it. It is the case of accused that said endorsement is made because cheque was security post dated cheque'. Complainant has failed to lead any evidence to clarify the status in this regard. The cheque in question also bears the stamp of "Centurion Bank of Punjab Ltd." on the back side. The aforesaid factors collectively shows that cheque in question Ex CW 1/1 was handed over to the Centurion Bank of Punjab Ltd. as security cheque at the time of sanctioning of loan and not to the complainant bank on 30.09.2010. The Hon'ble High Court of Delhi in case of Deepak Vig vs Avdesh Mittal. in CRL.M.C. 1136/2011 decided on 11.01.2012 has held that:
"7. Section 138 of the Act provides that wherein any cheque was drawn by a person for the payment of any amount of money to another person for the discharge, in whole or in part, of any debt or other liability, and it was returned by the drawer bank because the amount in the drawer's account was insufficient to honour the cheque or it exceeded the amount arranged to be paid to such persons, shall be deemed to have committed offence. Of course, before the offence is deemed to be committed, various other conditions are also required to be fulfilled with which this court is not concerned for the decision in the instant case. The important ingredient under section 138 of the Act with which we are concerned in this case is that the cheque must have been issued in discharge of in whole or in part of any debt or other liability. A plain reading of this provision would mean that if the cheque is not issued for the discharge of any debt or other liability, this section could not be invoked. It is trite that if the cheque is issued only as security for the performance of certain contract or agreement and not towards discharge of any debt or any other liability, the offence under section 138 of the Act is not attracted. In the case of M.S Narayana Menon (Supra) the accused as also the complainant were stock brokers. The complainant entered into certain transactions on behalf of the accused. Cheque issued by the accused in favour of the complainant was dishonoured. The plea that was taken by the accused was that the complainant was in dire need of financial assistance and the said cheque was issued to enable him to tide over his financial necessities CC No. 3373/12 Page 9 of 10 and it was not in discharge of any debt or liability payable to the complainant. The Supreme Court held that the defence is acceptable as probable and the cheque could not be said to have been issued in discharge of a debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the preview of section 138 of the Act. In the case of Joseph Vilangadan (Supra) the facts were that the Directors had given certain cheques as refundable security deposits to ensure due performance of their work. In the given facts and circumstances it was held that there did not exist any debt or liability and the cheques were given solely for the purpose of security and hence no action under section 138 of the Act was maintainable."
16. Thus, in view of law laid down by Hon'ble High Court of Delhi and the facts of present case, the liability of accused U/s 138 N.I. Act is not made out as cheque in question was given for security purpose only. Conclusion :-
17. In the facts and circumstances of the present case, on appreciation of the evidence and on the basis of material on record, the complainant has failed to prove the authority of Sh. Gopal Ranga and Sh. Somesh Sundriyal to institute and prosecute the present case. Moreover, accused is able able to adduce the rebuttal evidence that he had not given the cheque in question to the complainant to dishcarge his liability. Hence, in such a scenario, the burden shift back to the complainant to prove that cheque in question was issued by the accused to discharge his liability which the complainant has failed to discharge.
18. Therefore, no offence U/s 138 of N.I Act is made out against the accused. Hence, accused Suresh Bansal stands acquitted.
ANNOUNCED IN THE OPEN
COURT ON 28.03.2013
All the pages from 1 to 10 are
signed by me. (GAGANDEEP JINDAL)
METROPOLITAN MAGISTRATE (NI ACT) - 12,
DWARKA COURTS,NEW DELHI.
CC No. 3373/12 Page 10 of 10
CC No. 3373/12 Page 11 of 10