Delhi District Court
M/S Yes Bank vs . A. R. Industries Pvt. Ltd. on 1 November, 2011
1
CC No. 3486/09
IN THE COURT OF MS. GURMOHINA KAUR :
METROPOLITAN MAGISTRATE:SPECIAL COURT13,
DWARKA COURTS : NEW DELHI.
C.C NO.3486/09
M/s Yes Bank Vs. A. R. Industries Pvt. Ltd.
1. Complaint Case No. : 3486/09
2. Name of the complainant : M/s Yes Bank, A42,
Vishal Enclave, Opposite
TDI Mall, New
Delhi110027
Also at : 48, Nyaya Marg,
Chanakya Puri, New
Delhi110021
3. Name of the accused and his : 1. A.R. Industries Pvt.
parentage and residence Ltd., Through : Sh. Subhash
Aggarwal, (Director), 14/5,
Mathura Road, Faridabad,
Haryana121003
2. Sh. Subhash Aggarwal,
C1/66, Safdarjung
Development Area,
New Delhi110016
4. Offence complained of or proved: U/s 138 of the
Negotiable Instrument Act,
1881
5. Plea of the accused : Pleaded not guilty
2
CC No. 3486/09
6. Final Order : Both the Accused are
convicted
7. Date of Order : 01.11.2011
BRIEF FACTS OF THE CASE
1. The brief facts of the case are that the Complainant is a bank, incorporated as a company under the Companies Act, 1956, registered under the Banking Regulation Act, 1949 and having its registered office at Delhi. Mr. Pushpinder Singh is the Authorized Representative of the Complainant company who was substituted in the present complaint vide order dated 25.03.2011 and he has been authorized to represent the complainant company in terms of Power of Attorney executed on 28.10.2010.
2. It is stated in the complaint that a loan facility was granted by the complainant bank Vide Loan Account No. BLN000300000325 to the accused company and in consideration to absolve the liability arising out of the said loan, the accused company issued two cheques bearing no. 595316 dated 15.09.2008 & 595317 dated 15.10.2008 for an amount of Rs.1,08,457/ each and both drawn on State Bank of India, SBI, Faridabad121001 i.e. Ex.CW1/B & Ex.CW1/B1 and when the said cheque were presented for encashment were returned back with remark 'insufficient funds' vide cheque return memos dated 25.10.2008 i.e. Ex. CW1/C & Ex.CW1/C1. A legal demand notice which is Ex. CW1/D dated 05.11.2008 was sent by the complainant bank through its lawyer which was duly served on the accused vide registered AD 3 CC No. 3486/09 postal receipts dated 06.11.2008 which are Ex.CW1/D1 & Ex.CW1/D4 and duly signed Registered AD Card which is Ex.CW1/D5 and that the accused failed to make the payment within the statutory period of 15 days and hence this criminal complaint was filed by the complainant.
3. Upon service of Bailable Warrants, the accused put his appearance through counsel on 25.05.2010. Notice was framed against the accused person on 17.09.2010 to which they pleaded not guilty and claimed trial.
EVIDENCE
4. To support its case, the complainant company examined CW1 Mr. Pushpinder Singh, AR of the Complainant company on 25.03.2011 and 01.06.2011.
5. CW1 tendered his evidence by way of affidavit and reiterated the contents of the complaint and relied upon the documents filed at the stage of presummoning evidence. During the crossexamination of CW1 by the Ld. Counsels for the accused no. 2 stated that the accused no. 1 M/s A.R. Industries Pvt. Ltd. took a loan from the complainant bank and that the accused no. 2 who was the Director of M/s A.R. Industries Pvt. Ltd. had issued the cheques in question. It was further stated that the cheques in question were not handed over on the dates mentioned on the cheques in question. It was further stated that accused no. 2 was in full control of the cheques in question even after the same were handed over to the complainant bank. CW1 also stated that the cheques in question were firstly presented on different dates and when they got dishonoured, they were again 4 CC No. 3486/09 presented for the second time together and the return memos with respect to second presentation of the cheques in question have been placed on record. It was also stated that with respect to the legal demand notice the word acknowledgment has not been mentioned and that the AD card has been stamped only on one side. It was further stated that the AD card does not bears the signatures of accused no. 2 Mr. Subhash Aggarwal but bears the signatures of one Ms. Aarti. CW1, however, denied that the aforesaid AD card is forged and fabricated.
6. CW1 also stated that a payment of Rs.58000/ and Rs.51,207/ was received on behalf of M/s A.R. Industries Pvt. Ltd., however, in the receipts placed before the court with respect to the same, the name of the depositor was not clear and it was further added that he would verify that the aforesaid payments were with respect to the present cheques in question. CW1, however, denied the suggestion that the payment receipt Ex.CW1/DX and Ex.CW1/DY pertains to the cheques in question. It was further added that the accused no. 2 was the signatory of the loan agreements and that the cheques in question were issued by him in his capacity as Director of the Accused no. 1 M/s A.R. Industries Pvt. Ltd. and not in his personal capacity. CW1 also stated that the accused no. 2 was not informed before the presentation of the cheques in question since the cheques were issued by him and he was well aware that the same could be presented for encashment.
7. Complainant Evidence was thereafter closed on 01.06.2011.
8. The statement of the accused no. 2 under Section 313 of Cr.P.C. was thereafter recorded on 06.07.2011 wherein he stated that the loan 5 CC No. 3486/09 was taken by the accused company M/s A.R. Industries Pvt. Ltd. and that a payment of more than Rs. 1 lakh has been made towards the cheques in question and that there was no legal outstanding liability against the cheques in question.
9. Thereafter, the matter was fixed for D.E. on 04.08.2011 vide order dated 22.07.2011. The defence submitted that they do not wish to lead D.E. on 04.08.2011 and thereafter, both the parties lead their final arguments on 21.09.2011.
ARGUMENTS
10. During final arguments, Ld. Counsel for Complainant company submitted that all the necessary ingredients of Section 138 of the Negotiable Instruments Act had been fulfilled. Ld. Counsel further argued that the cheque in question was issued by the accused in discharge of his admitted liability. Ld. Counsel for the complainant further argued that no suggestion was put in the crossexamination of CW1 with respect to the factum of loan availed by the accused. It was argued that the accused has been unable to rebut the presumption raised by virtue of Section 118 of the Negotiable Instrument Act. Ld. Counsel for the complainant also argued that the onus to prove whether the cheque in question was a security cheque or not was on the accused and he had failed to prove the same. It was also argued that no application was moved on behalf of the accused nor any documents were placed on record by the accused to show that the accused had no outstanding legal liability pending against him. It was further argued that no suggestion was put during the cross examination of CW1 with respect to the fact that the cheque in 6 CC No. 3486/09 question was of the outstanding liability due against the accused as on the date mentioned in the cheque in question. With respect to the service of legal demand notice, Ld. Counsel for the complainant argued that there was no suggestion during the crossexamination of CW1 as to whether the address mentioned on the legal demand notice was correct or not. Also, it was argued that the legal demand notice was duly signed as postal, courier and duly signed AD Card have been placed on record and hence, the presumption of valid service is made in accordance with the provisions of Section 27 of the General Clauses Act.
11. On the other hand, Ld. Counsel for the accused has argued that the complainant has failed to prove the transaction between the complainant company and the accused as no loan agreement or any document of statement of account has been placed on record by the complainant company. It was also argued that just because the complainant company was in possession of the cheques in question and the same was presented for encashment does not by itself fulfill all the necessary criteria and ingredients U/s 138 of Negotiable Instrument Act and that the onus to prove its case beyond all reasonable doubts is that on the complainant and not on the accused. It was further argued that the accused has made the part payment with respect to the cheques in question and copy of receipt with respect to the same has been placed on record and that no document/material or any other fact has been put to his court by the complainant to deny or rebut the aforesaid fact. It was further argued that the witness examined by the complainant was himself not aware about the facts of the case and was unable to prove the case as was alleged by the 7 CC No. 3486/09 complainant company against the accused.
SECTION 138 NEGOTIABLE INSTRUMENTS ACT
12. This court has heard the arguments on both the sides and have carefully gone through the record. On the basis of the facts and arguments placed before the court, Two main issues are to be decided as hereunder: i. Whether the legal demand notice was served to the accused persons?
ii. Whether there was legally enforceable liability outstanding against the accused persons as on the date of presentation of the cheques in question?
13. It is now pertinent to go through Section 138 of Negotiable Instruments Act.
138. Dishonour of cheque for insufficiency, etc., of funds in the accounts Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for"a term which may extend to two year", or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.8 CC No. 3486/09
(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque,"within thirty days" of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and
(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability.
14. It is pertinent to mention section 139 and Section 118 of the Negotiable Instruments Act which are as follows:
"Section 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."
"Section 118. Presumption of Negotiable Instruments of consideration Unless the contrary is proved, the following presumptions shall be made
(a) of considerationthat 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;
(b) as to date that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance that every accepted bill of exchange was accepted within a reasonable time after its date its date and before its maturity;
(d) as to time of transfer. that every transfer of a negotiable 9 CC No. 3486/09 instrument was made before its maturity;
(e) as to order of endorsements that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stampsthat a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course that the holder of a negotiable instrument is a holder in due course; provided that, where the instrument has been contained from its lawful owner, or form any person in lawful custody thereof, by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
15. Section 139 of the Negotiable Instruments Act lays down that it shall be presumed, unless contrary is proved that the holder of the cheque received the cheque of the nature stated in section 138 for the discharge of a debt or liability.
ISSUE NO. 1 : Whether the legal demand notice was served to the accused persons?
16. It is pertinent to mention Section 27 of the General Clauses Act wherein a presumption of service is drawn in if a notice is sent at the correct address of the accused. Section 27 of the General Clauses Act, 1897 deals with the presumption of deemed service. The Section Reads as under: "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 is used, then, unless a different 10 CC No. 3486/09 intention appears, the service shall be deemed to be effected by properly addressing prepaying 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".
17. The legal demand notice was sent by the complainant bank through postal department vide postal receipts dated 06.11.2008 to both the accused.
18. With respect to the accused no. 2, the main contention is that the alleged AD Card i.e. on record do not bear the stamp and seal of the of the postal department nor contain the signatures of the accused no.2 himself and hence, presumption of service can not be raised. It is argued by the Ld. Counsel for accused no. 2 that CW1 has admitted in his crossexamination that he did not personally sent the legal demand notice. The word acknowledgment has not been mentioned on the Card nor it bears the signatures of the accused no.
2.
19. On a careful analysis of the judicial record, it is seen that legal demand notice were sent at the correct addresses of the accused persons within a stipulated time period.
20. With respect to the accused no. 1, being the accused company, legal demand notice was also deemed served by virtue of the postal receipt placed on court record.
11CC No. 3486/09
21. With respect to accused no. 2, it is seen that in view of provisions 138 N.I. Act and Section 27 General Clauses Act, prima facie, presumption of service is raised in favour of accused no. 2 and that it is the duty of the accused no. 2 to examine any postal witness or any other person in order to rebut the aforesaid presumption. However, no evidence was lead on behalf of the accused no. 2 in this respect and only some questions were put during the crossexamination of AR. It is seen that the legal demand notice was never sent by the AR personally but was sent through the counsel or attorney of the complainant. In this case also the legal demand notice was sent through attorney of the complainant by way of registered AD and postal receipt of the same are placed on record. Also, the address mentioned of all the accused are correct and nothing has come on record to show that any of the accused persons do not reside at the address stated in the legal demand notice as well as the complaint. It is also seen that the bail bonds filled in by both the accused no. 1 and 2 bears the same address as that mentioned in the legal demand notice as well as complaint. The accused no. 2 has not examined any part or no document has been placed on record to show that the address mentioned in the complaint is wrong. Further, nothing has been placed on record by the accused no. 2 to rebut the presumption raised by virtue of Section 27 General Clauses Act. The statement made by CW1 in his crossexamination with respect to the legal demand notice that he had not personally sent the same but he has reiterated that legal demand notices were duly sent to all the accused persons. CW1 has also denied the fact that the AD Cards placed on record are false and fabricated. In order to rebut the aforesaid 12 CC No. 3486/09 statement, no witness or document produced before the court by the accused no. 2. In view of the aforesaid facts, the issue is decided in favour of the complainant and presumption of valid service is made out against both the accused persons.
ISSUE NO. 2 : Whether there was legally enforceable liability outstanding against the accused persons as on the date of presentation of the cheques in question?
22. It is the case of the complainant that the accused company had taken a loan from the complainant bank and had issued the cheques in question towards the monthly installments of the same. Accused no. 2 is the signatory of the cheques in question being the Director of the accused company. It is an admitted fact that the accused company availed the loan facility from the complainant bank. In the present case, CW1 admitted that a payment of approx. Rs. 1 lakh was received from the accused no. 1 vide two payments on 15.10.2008 and 16.10.2008 vider receipts Ex.CW1/DX and Ex.CW1/DY. On the perusal of the present file, it is seen that both the cheques in question were presented for encashment on 25.10.2008. CW1 in his cross examination has denied the fact that the payment receipts pertains to the cheques in question. CW1 also stated that he would have to verify whether the payment was towards the cheques in question. It is an admitted fact that the liability of the accused towards the loan account was subsisting at the time of commission of the offence. The accused has not placed before the court any statement of account or any other document to show that the payments being made in October 2008 were towards the installments of the month of October 13 CC No. 3486/09 2008 and not towards the entire loan account outstanding on that date. Onus was on the accused to produce before the court any communication between the parties or any other document wherein the accused no. 2 had specifically stated that the payments being made in October 2008 were towards the monthly installment for the same month. No evidence has been lead by defence to show that at the time of commission of the offence there was no legally enforceable liability outstanding against the accused and it is also to be seen that the cheques in question were handed over to the complainant towards the payment of EMIs. Any payment, if made by the complainant company, other than by cheques would therefore be made against the outstanding dues, if any. The defence has not been able to rebut the aforesaid presumption and to prove that the payment made was with respect to the monthly installment for the month of September & October 2008.
23. Accordingly, the issue no. 2 is decided in favour of the complainant and against the accused nos. 1 and 2. FINAL ORDER
24. In view of the aforesaid facts and discussions, this court is of the opinion that the complainant has been able to prove its case and the accused persons have failed to rebut the presumption raised by virtue of Section 139/141 N.I. Act. Hence, the accused no. 1(Accused company), - M/s A.R. Industries Pvt. Ltd., Accused No. 2 - Mr. Subhash Aggarwal are hereby convicted for an offence U/s 138 N.I. Act.
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25. Copy of the judgment be provided to all the accused free of cost.
26. Now to come up for orders on quantum of sentence.
Announced in the Open Court
on 1st November 2011 (GURMOHINA KAUR)
METROPOLITAN MAGISTRATE
DWARKA COURT:NEW DELHI