Delhi District Court
Kumar D. vs . Stae Of Delhi 2011 (3) Lrc 210 (Del.) But ... on 30 July, 2011
IN THE COURT OF MS. NITI PHUTELA
METROPOLITAN MAGISTRATE, DWARKA COURTS, NEW DELHI
OMEX CHIT FUNDS PVT. LTD. V. SHASHI SHARMA
CC NO. : 23724/10
P.S. : Pratap Nagar
U/s : 138 Negotiable Instruments Act
J U D G M E N T
1 Date of the commission of offence : 08/07/2009 approx.
2 Name & address of the : Omex Chit Fund Pvt. Ltd.
33, Kishan Ganj Market Old Rohtak Road, Delhi through A.R. of the Complainant Sh. Suresh Kumar Aggarwal 3 Name of the accused and address : Smt. Shashi Sharma, W/o Sh. Sunil Sharma Prop. Ms. Prince Beauty Parlour Shop No. 200, Padam Nagar, Delhi - 110 007 4 Offence complained of : u/s 138 Negotiable Instruments Act 5 Plea of accused : Pleaded not guilty 6 Final order : Convicted 7 Date of such order : 30/07/11 Date of Institution of case : 12/08/2009 Date of decision of the case : 30/07/2011 Case No. : 23724/10 Page No. 1 of 17 BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. Vide present judgment I shall decide the complaint case U/s 138 Negotiable Instrument Act 1881 (as amended upto date) filed by the complainant Omex Chit Fund Pvt. Ltd., 33, Kishan Ganj Market, Old Rohtak road, Delhi through its Director/Authorised Representative Sh. Suresh Kumar Aggarwal, to appear and depose on behalf of the complainant against the accused Shashi Sharma w/o Sh. Sunil Sharma.
2. The brief sketch of the case in hand is that the accused entered into a chit agreement dated 20/11/06 with the complainant and was a member of Chit Group No. CCF44, with ticket No. 23 in the group and has participated in the auction dated 25/03/07. She was the highest bidder and therefore the chit was prized in her favour and the chit fund was granted to her by way of cheque, bearing No. 382525.
3. The accused failed to follow the financial discipline and she had not paid any installments from March 2008. Due to these lapses on her part reminders were also sent by the complainant Case No. : 23724/10 Page No. 2 of 17 to the accused to make timely payment. On the receipt of the reminder notices the accused held a meeting with the official of the complainant and issued two post dated cheques for the payment of the installment amount along with interest accrued. The cheque in question (bearing No. 253008 drawn on Allahabad Bank, Kishanganj Branch, New Delhi amounting to Rs. 75,000/) is also one of the aforesaid cheque which were presented by the complainant on the assurance that the same will be encashed. However, on presentation of the same the said cheque got dishonoured vide cheque returning memo for the reasons "Funds Insufficient". The complainant thereafter sent a legal notice of demand to the accused calling her to make the payment within 15 days of the receipt of the notice failing which an offence punishable U/s 138 Negotiable Instruments Act is deemed to have been committed. As a result of which the complainant has filed the instant complaint for prosecution of the accused U/s 138 Negotiable Instrument Act.
4. After the complaint was filed, the Authorized Representative (AR) of the complainant led his presummoning evidence by way of an affidavit and thereafter hearing the counsel for the complainant and considering the entire material and Case No. : 23724/10 Page No. 3 of 17 documents on record, summons were issued against the accused vide order dated 12/08/09 for the offence U/s 138 Negotiable Instrument Act 1881. On appearance of the accused a separate notice U/s 251 Cr.P.C. dated 03/09/10 was given to the accused to which she pleaded not guilty and claimed trial. Complainant Evidence
5. On 22/09/10, Sh Suresh Kumar Aggarwal, AR of the complainant got himself examined as CW1 and filed an affidavit in evidence which is Ex. CW 1/A. He got exhibited his authorisation letter/extracts of minutes of meeting dated 10/06/09 as Ex. CW1/1, original cheque before the court as Ex. CW1/2 and the cheque returning memo dated 26/05/09 as Ex. CW1/3, the legal notice of demand dated 18/06/09 as Ex. CW1/4, receipt of UPC dated 20/06/09 is Ex. CW1/5 and receipt of speed post Ex. CW1/6 dated 20/06/09 vide which the aforesaid notice was sent. The complaint was exhibited as Ex. CW1/7. The photocopy of the Chit agreement is exhibited as Ex. CW1/8.
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6. The witness was cross examined in brief by the counsel for the accused in which he denied the suggestion that only three installments of Rs. 11,000/ were outstanding against the accused. There was no major crossexamination on the material facts deposed in the affidavit of the witness. He was thereafter discharged. The the matter was fixed for statement of accused. Statement of accused U/s 313 CrPC
7. Complainant evidence was followed by the statement of accused u/s 313 Cr.P.C. in which all the incriminating evidence along with exhibited documents were put to the accused Shashi Sharma in which she admitted that she had executed chit fund agreement and she was declared highest bidder in the auction. She further stated that the cheque in question i.e. Ex. CW1/2 was issued by her as security cheque at the time of executing the agreement in favour of the complainant by her. She also submitted that only three installments were outstanding against her. She further stated that the cheque in question was presented without any intimation to her therefore the said cheque might have been dishonoured because there were no sufficient funds in her account. She denied the receiving of any legal demand notice from the complainant. She stated that Case No. : 23724/10 Page No. 5 of 17 whenever any installment amounts were paid no receipt for the payment were issued to her. She admitted that she has a liability to pay three installments of approx. Rs. 30,000/ (in total) and she is even ready to pay the same on the condition that the other cheques and documents should be returned to her. The case was then fixed for defence evidence. Defence Evidence
8. The case was listed for defence evidence for 12/11/10. For many subsequent dates accused was not regular in the court and many a times even NBW's were issued against her which were subsequently cancelled. Finally on 07/02/11 application U/s 315 CrPC was moved on behalf of the accused which was allowed. The accused entered into witness box and was examined as DW1. In her examination in chief the accused stated that she applied for chit fund in the year 2006 for the amount of Rs. 3,00,000/. She testified that amount of Rs. 2,19,000/ was bidded in her favour after deducting fifth and sixth installment of Rs. 10,000/ each. She admitted that she had made the payment of 18 installments and only 23 installments were outstanding against her. She again reiterated what she said in her statement U/s 313 CrPC that no receipts Case No. : 23724/10 Page No. 6 of 17 were issued to her for the payment of installments.
9. She was crossexamined by the counsel for the complainant in which she admitted that chit amount was repayable in 30 installments. She stated that she had no knowledge regarding the balance in her account and she had even not made any prior arrangements for maintaining the balance in her account because she had no knowledge that the complainant will present the cheque in the year 2009 which was issued by her in the year 2006. She admitted the suggestion of the counsel that from the period 2006 to 2009 there was no balance in the sum of rs. 10,000/ in her account. She denied receiving of legal demand notice therefore the counsel for the complainant confronted her with documents Ex. X/1 to Ex. X/4 (Ex. X/1 is the reminder to the accused for overdue installments which was dated 21/06/08, document Ex. X/2 was the second reminder dated 21/07/08, document Ex. X/3 is the speed post receipt vide which reminder notice dated 21/08/10 was sent to the accused and document Ex. X/4 is the A.D. Card dated 29/07/08 pertaining to the reminder notice Ex. X/2) to which she bluntly answered that she had not received any legal demand notice.
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10. She disclosed that the chit amount was paid to her through cash and the said cheque vide which chit amount was sanctioned to her were presented in her bank and the same was encashed and credited in her account but the same was credited after deducting fifth and sixth installment of Rs. 10,000/ each. She further admitted that she had to pay Rs. 3,00,000 as chit amount in lieu of Rs. 2,19,000/ i.e. the amount which was actually disbursed to her. She stated that installment amount was not exactly 10,000/ and the representative of the complainant use to inform the accused regarding the installment amount every month but generally it was about Rs. 9,000/. She further stated that every month installment amount was paid by her husband. The accused deposed that she had issued 22 cheques to the complainant and not just two cheques as is the version of the complainant. She further alleged to that she had made the payment of Rs. 25,000/ in cash but no receipt was issued to her. She denied that there is liability outstanding against her to pay the cheque amount in question as according to her only four installments were pending against her. Witness was thereafter discharged.
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11. The second witness i.e. husband of the accused entered into the witness box and was examined as DW2. He was examined in chief in which he stated that he had handed over 23 blank cheques signed by his wife to the complainant and generally the installments were paid by him and only on two or three occasions his son has gone to the office of the complainant to pay the installment amount. He deposed that the loan was generally repaid in cash and only on one occasion cheque was issued by his wife. He was crossexamined by the counsel for the complainant in which he stated that chit fund was not granted through cheque but the chit amount was voluntarily transferred in the account of his wife after deducting the installment amount of Rs. 7800/. He further denied the suggestion that his wife was declared the highest bidder for the chit for Rs. 3,00,000/ at discount. He stated that he paid the first installment of Rs. 17,000/ in the month of November 2006 and last installment in the sum of Rs. 9800/ was paid by him on behalf of his wife on 25/02/09.
12. The witness filed on record list pertaining to 21 cheques which were handed over by the accused to the complainant, the exhibition of which was not objected and the same was exhibited Case No. : 23724/10 Page No. 9 of 17 as Ex. DW2/1. He further stated that two cheques which were issued to the complainant which were bearing No. 253007 and 263871 were encashed by the complainant and apart from these two cheques, the other 21 cheques (the list of which is filed on record) are in possession of the complainant. The witness was thereafter discharged and vide separate statement of the counsel for the accused defence evidence was closed on 05/03/11 and the matter was listed for final arguments.
Arguments
13. Final arguments were addressed by the parties on 28/03/11 and further on 29/06/11.
Appreciation of Facts, Evidence and Arguments
14. First limb of arguments advanced by the Ld. Counsel for the accused is that the cheque in question is not towards any liability because the same was not given to the complainant by the accused at the time of loan. It is further argued that it is admitted fact and also the statement of account is on record that loan was disbursed to the accused after the payment of six installments and therefore the cheque cannot be towards the Case No. : 23724/10 Page No. 10 of 17 valid consideration. It is also argued by counsel for the accused that particulars in the cheque except the sign were not filled by the accused and therefore the security cheque of the accused has been misused by the complainant.
15. Hearing the arguments and considering the documents available on record the defence taken by the accused that she has not filled the particulars in the cheque in question does not appear plausible in the light of the judgment of Honble Delhi High Court in Ravi Chopra v. State & Anr. 2008 (102) DRJ 147 where in Para No 18 - 20 it is discussed that there is no requirement of filling each and every particular in the body of the cheque by the drawer of the cheque himself and if the signatures are admitted then the cheque will be a valid negotiable instrument. For reference the relevant portions of the judgment are as follows :
"18. Section 20 NI Act talks of "inchoate stamped instruments" and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an incomplete negotiable instrument" such person thereby gives prima facie authority to the holder thereof "to make or complete as the case may be upon it, a Case No. : 23724/10 Page No. 11 of 17 negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp." Section 49 permits the holder of a negotiable instrument endorsed in blank to fill up the said instrument "by writing upon the endorsement, a direction to pay any other person as endorse and to complete the endorsement into a blank cheque, it makes it clear that by doing that the holder does not thereby incurred the responsibility of an endorser."
Likewise Section 86 states that where the holder acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in the bill, or which substitutes a different place or time for payment, or which, where the drawee are not partners, is not signed by all the drawees, all previous parties whose consent has not been obtained to such acceptance would stand discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance. Section 125 NI Act permits the holder of an uncrossed cheque to cross it and that would not render the cheque invalid for the purposes of presentation for payment. These provisions indicate that under the scheme of the NI Act an incomplete cheque which is subsequently filled up as to the name, date and amount is not rendered void only because it was so done after the cheque was signed and delivered to the holder in due course.
19. The above provisions have to be read together with Section 118 NI Act which sets out various presumptions as to negotiable instruments. The presumption is of consideration, as to date, as to time Case No. : 23724/10 Page No. 12 of 17 of acceptance, as to transfer, as to endorsement, as to stamp. The only exception to this is provided in proviso to Section 118 ............"
20. A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Act which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a 'material alteration' for the purposes of Section 87 NI Act. What however is essential is that the cheque must have been signed by the drawer. If the signature is altered or does not tally with the normal signature of the maker, that would be a material alteration. Therefore as long as the cheque has been signed by the drawer, the fact that the ink in which the name and figures are written or the date is filled up is different from the ink of the signature is not a material alteration for the purposes of Section 87 NI Act."
16. It is also pertinent to mention here that though DW2 i.e. husband of the accused has filed on record the list of 22 cheques which were exhibited as Ex. DW2/1 which as per her version were handed over by the accused to the complainant at the time Case No. : 23724/10 Page No. 13 of 17 of grant of chit fund to her but this document is not having much evidentiary weight because of the fact that it is manually prepared and the same is neither the counter foil nor the index of the cheque book from which the cheques were issued by the accused to the complainant. Even the perusal of the list shows that the cheque numbers mentioned are not in series and therefore there is quite a strong possibility that the cheques were issued for repayment of loan and not merely as security cheque. On this point Ld. Counsel for the accused has also relied the judgment of Hon'ble Delhi High Court in the case titled as Ravi Kumar D. vs. Stae of Delhi 2011 (3) LRC 210 (Del.) but the accused has failed to bring in any sufficient evidence to show that the cheques were for security purpose. Therefore, the above said judgment of Hon'ble Delhi High Court is not applicable to the case in hand. The accused has thus failed to show that the cheque issued by her was a security cheque and that was without any valid consideration.
17. It is also pertinent to mention here that accused in her evidence has admitted that she had paid only 18 installments and the loan admittedly was repayable in 30 monthly installments. Therefore it is clear that on the date of the cheque Case No. : 23724/10 Page No. 14 of 17 i.e. 20/05/2009 there was surely some liability against the accused. Now the question is that on the date of the cheque was there any liability in the sum of Rs. 75,000/ against the accused or not ? This has been answered by the complainant by bringing on record reminder notices which were sent to the accused and were exhibited as Ex. X/1 and Ex. X/2 and acknowledgment of the same is also on record. Therefore as per the provisions of Section 27 General Clauses Act the notice sent on correct address of the accused is presumed to be served in due course and merely denial of receiving of notice will not provide any succor to the accused. As per the notices the accused was not making any payment to the complainant since March 2008.
18. The complainant has not left any stone unturned to prove the case against the accused and for this purpose the complainant even filed on record the statement of account of the accused as per the orders of the court on 28/03/11 and as per this statement also liability of the accused on 25/05/09 was to the tune of Rs. 75,000/. Moreover, there were major contradictions in the testimonies of both the witnesses i.e. accused and Sh. Sunil Sharma i.e. DW2, husband of the accused which also go against the accused. Therefore, the Case No. : 23724/10 Page No. 15 of 17 complainant has clearly proved that the cheque which was issued by the accused was towards valid consideration and was for discharge for legally enforceable liability against the accused.
19. Second limb of argument advanced by Ld. Counsel for the accused is that the accused is that the complainant being foreman has violated various terms and provisions of Madras Chit Fund Act 1961 which is also applicable on Delhi by not taking any valid surety from the prized subscriber as per Section 23 of the Aforesaid Act.
These bald arguments without any iota of evidence will not be of any help and these hollow arguments will not save the skin of the accused. Therefore, the complainant has in all respects proved that all the essential ingredients for making the accused liable for the offence U/s 138 N.I. Act are fulfilled and the accused have no valid defence in her favour. Decision and reasoning
20. In view of the above discussion it is evident that the basic ingredients of the offence U/s 138 Negotiable Instruments Act have been made out and the accused failed to make any payment towards the cheque in question. Therefore, offence U/s 138 Case No. : 23724/10 Page No. 16 of 17 Negotiable Instruments Act stands proved against the accused. The accused therefore stands convicted for the above said offence.
Let the accused be heard on the point of sentence. Copy of the judgment be given to the accused free of cost.
Announced in the open court
today i.e. 30/07/11 (NITI PHUTELA)
MM: DWARKA
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