Delhi District Court
Libra Leasing vs Jagat Singh on 4 April, 2013
IN THE COURT OF SHRI ABHILASH MALHOTRA:METROPOLITAN
MAGISTRATE:DWARKA COURTS:NEW DELHI
CC. No. 2287/12
Unique Case ID No. : 02405R1322332005
M/s Libra Leasing Ltd.
Having its Office at
B-2, Bhargava Lane,
Boulevard Road,
Delhi - 110 054
......... Complainant
VERSUS
1. Sh. Jagat Singh
S/o Sh. Ram Kishan
Village Fateh Pur Beri
New Delhi - 110 030.
2. Sh. Bijender Singh
S/o Sh. Bhagwat Singh
Village Fateh Pur Beri
New Delhi - 110 030.
....... Accused
Offence complained of or proved : Under Section 138 of Negotiable
Instruments Act, 1881.
Plea of the Accused : Pleaded not guilty
Date of filing : 15.10.2005
Date of Institution : 15.10.2005
Date of reserving judgment/order : 26.03.2013
Final order/Judgment : Accused is acquitted.
Date of pronouncement of judgment : 04.04.2013
BRIEF FACTS AND REASONS FOR THE DECISION OF THE CASE:-
1. The present complaint has been filed U/s 138 Negotiable Instruments Act, 1881 Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 1/15 Judgment dated 04.04.2013 by the complainant. The complainant is a company incorporated under the Companies Act and engaged in the business of motor and general financing. The complaint has been filed by Sh. Surender Singh, Authorised Representative of the complainant.
2. It is the case of the complainant that accused no. 1 has approached complainant to take on hire purchase basis a vehicle having model bearing no. LPT-3516 (model 2003). Considering the request of the accused, complainant agreed to give the vehicle bearing no. HR 47C 7752 of the aforesaid model on hire purchase basis. A hire purchase agreement bearing no. H-876 was executed between the parties on 25.04.2003. Accused no. 2 stood as guarantor of accused no. 1. After availing the hire purchase facility accused failed to comply the contractual obligations and failed to make payment as per the terms and conditions of the agreement. Thereafter various oral as well as written reminders were sent to the accused demanding the outstanding amount. Despite the said reminders accused failed to make payment and complainant was constrained to repossess the vehicle as per the agreement. After repossession the vehicle was sold and the amount realized from the sale of vehicle was adjusted in the account of the accused. Thereafter, complainant issued a notice dated 13.04.2005 calling upon the accused to pay a sum of Rs. 2,45,796.89/- arrived at after adjusting sale proceeds and including an interest of 3% per month. It was stated in the notice that in case the accused failed to make payment within 10 days from the receipt of legal notice the matter shall be referred to the sole arbitration of Sh. R.C. Vashist, Advocate for adjudication.
3. It is stated in the complaint that after receipt of the notice dated 13.04.2005, accused no. 1 approached the complainant company and issued cheque in question bearing no. 419741 dated 04.08.2005 for a sum of Rs. 2,51,379/- drawn on Syndicate Bank, Fatehpur Beri, New Delhi. Thereafter, the complainant presented the said cheque through its banker Punjab & Sindh Bank, Roshanara Road, Delhi and it was Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 2/15 Judgment dated 04.04.2013 dishonored vide return memo dated 05.08.2005 with reason 'Funds Insufficient'. After that the complainant issued legal notice dated 12.08.2005 demanding the cheque amount. Accused failed to make payment of cheque amount within 15 days from the receipt of notice and the present complaint was filed.
4. The pre summoning affidavit was tendered on 07.11.2005. Thereafter, by order dated 07.02.2006 my Ld. Predecessor summoned both the accused no. 1 and 2. Thereafter, by order dated 19.08.2011 the proceedings against accused no. 2 were dropped and notice U/s 251 Cr.PC. was framed against accused no. 1. Accused no. 1 pleaded not guilty and claimed trial. The accused was examined U/s 313 Cr.PC. on 21.09.2012. During the course of proceedings accused had moved an application U/s 12 of Contempt of Courts Act, 1971. The said application was dismissed as withdrawn by order dated 29.11.2011. On 24.01.2012 complainant moved an application to bring on record Power of Attorney. By order dated 10.05.2012 complainant application dated 24.01.2012 to bring on record Power of Attorney was dismissed as withdrawn and application dated 10.05.2012 seeking permission to file the Power of Attorney was allowed and Power of Attorney dated 11.04.2012 was taken on record. The said Power of Attorney was later on exhibited as Ex. CW1/13. The application of accused U/s 243(2) Cr.PC. r/w Section 45, Indian Evidence Act seeking forensic examination of documents which was dismissed vide order dated 19.12.12.
5. In order to discharge his onus the complainant has examined CW1 Sh. Surender Singh. On the other hand the accused has examined himself as DW1 and Sh. Vijender Singh as DW2.
6. CW1 has filed on record documents Ex. CW1/1 to Ex. CW1/13. Ex. CW1/1 is Copy of Certificate of Commencement of Business. Ex. CW1/2 is Copy of Board Resolution dated 15.01.2005, Ex. CW1/3 is Copy of Hire Purchase Agreement, Ex.
Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 3/15 Judgment dated 04.04.2013 CW1/4 is Copy of Legal notice dated 13.04.2005 and Copy of postal receipts, Ex. CW1/5 is cheque in question dated 04.08.2005, Ex. CW1/6 is cheque return memo, Ex. CW1/7 is intimation slip dated 06.08.2005, Ex. CW1/8 is legal notice dated 12.08.2005, Ex. CW1/9 and Ex. CW1/10 are postal receipts. Ex. CW1/11 and Ex. CW1/12 are Acknowledgment Cards. Ex. CW1/13 is Power of Attorney dated 11.04.2012. On the other hand DW2 has filed on record judgment dated 30.10.2012 passed by the court of Sh. Arun Kumar, Ld. MM, Dwarka Court which is Ex. DW2/A.
7. It is argued by the complainant that accused has availed finance facility from the complainant and has failed to make the payment as per terms and conditions of the agreement. It is submitted that the cheque is issued towards discharge of the liability and accused has failed to make the payment. It is submitted that the cheque has been dishonored due to reason 'Funds Insufficient' and offence U/s 138 NI Act, 1881 is made out. It is submitted that the accused has failed to rebut the presumption U/s 139 Negotiable Instruments Act and is liable to be punished as per law.
8. On the other hand, accused has taken a defence that there are inconsistencies in the disposition of CW1. It is also argued that Mr. Surender Singh is not authorised to prosecute the present case. It is also submitted that accused has never received legal notice. It is also submitted that accused is not liable to pay the cheque amount and the cheque in question was issued as a security cheque at the time of execution of the loan agreement. Written submissions are also filed by the accused giving detailed arguments in defence.
9. In nutshell accused has raised two main defences. Firstly Mr. Surender Singh, Authorized Representative is not authorized to file and prosecute the present complaint and secondly complainant has failed to establish the liability of the accused on the date of cheque and the cheque in question is a security cheque.
Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 4/15 Judgment dated 04.04.2013 A. Authority to File And Prosecute Complaint
10. Before proceeding further to determine whether Mr Surinder Singh has been duly authorized to file and prosecute the present complaint, it will be prudent to refer the judgment of higher courts to understand the concept and law laid down in this regard.
11. 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.....
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 Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 5/15 Judgment dated 04.04.2013 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."
12. 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."
13. While dealing with section 85 of the Indian Evidence Act, 1872 in case of 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 Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 6/15 Judgment dated 04.04.2013 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."
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 Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 7/15 Judgment dated 04.04.2013 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."
14. In Wali Mohammad Chaudhari And Ors. vs Jamal Uddin Chaudhari, AIR 1950 All 524 it was held that:
"3. Under Section 85, Evidence Act, "'there is a presumption that every document purporting to be a power of attorney, and to have been executed before and authenticated by, a notary public, or any Court, Judge, Magistrate, British Counsel or Vice-Counsel or representative of Her Majesty or of the Central Government, was so executed and authenticated. The authentication is not merely attestation, but something more. It means that the person authenticating has assured himself of the identity of the person who has signed the instrument as well as the fact of execution. It is for this reason that a power of attorney bearing the authentication of a notary public or an authority mentioned in Section 85 is taken as sufficient evidence of the execution of the instrument by the person who appears to be the executant on the face of it. The presumption, no doubt, is rebuttable. But unless rebutted the presumption stands and the document can be admitted in evidence as a' document executed by the person alleged to have executed it without any further proof: vide Haggitt v. Ineff, (1855) 24 L. J. Ch. 120 : (3 W. R. 141) and Performing Right Society Ltd. v. Indian Morning Post Restaurant, A. I. R. (26) 1939 Bom. 347: (I. L. R. (1939) Bom. 295)."
15. So far as the question of authority of Sh. Surender Singh, Authorized Representative is concerned, it would be pertinent to point out here that the complainant has relied upon a copy of Board Resolution which is Ex. CW1/2 and Power of Attorney Ex. CW1/13. Power of Attorney Ex CW 1/13 was taken on record by order dated 10.05.2012. Ex. CW1/2 is certified copy of Board Resolution dated 15.01.2005. This copy is certified by Manager of the complainant. The original of this document has not been produced in the court and no leave of the court U/s 65 of the Indian Evidence Act, 1872 has been obtained to rely upon the secondary evidence.
Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 8/15 Judgment dated 04.04.2013 Therefore, I am afraid that this document Ex. CW1/2 not being the primary evidence cannot be read into evidence.
16. Complainant has also filed on record Power of Attorney Ex. CW1/13 executed by one Sh. Harjit Singh in favour of Sh. Surender Singh, AR. The said Power of Attorney do not mention the details of the Board Resolution by which Sh. Harjit Singh has been authorized by the complainant company to execute the Power of Attorney. Apart from this, said Power of Attorney is not authenticated by the Notary Public as required U/s 85 of the Indian Evidence Act, 1872. As the Power of Attorney has not been authenticated therefore the presumption U/s 85 of the Indian Evidence Act, 1872 is not attracted. The complainant failed to bring the executor Sh. Harjit Singh in to witness box. The Board Resolution authorizing Sh. Harjit Singh to execute the Power of Attorney is also not filed on record. No steps have been taken by the complainant to ratify the authority in favour of Sh. Surender Singh despite clear and categorical objections of the accused. Therefore, I concur with the argument of the accused that Sh. Surender Singh is not authorized to file and prosecute the case on behalf of the complainant as per law.
B. Liability of Accused
17. The second main contention of the accused is regarding the liability of the accused on the date of cheque. The cheque in present case Ex CW 1/5 is dated 04.08.2005 which was dishonored on 05.08.2005 due to reason insufficient funds vide returning memo Ex CW 1/6. It is admitted position of the parties that the vehicle was taken by the accused from the complainant on hire purchase basis. It is trite that accused is liable to pay the hire charges to the complainant only for the period he uses the vehicle on hire and it is only upon the payment of the final installment the option to purchase or transfer of title in favor of the hirer arises. CW1 in his testimony has admitted that the vehicle in question has been repossessed on 07.10.2004. Therefore, Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 9/15 Judgment dated 04.04.2013 the relevant date for calculating the hire charges and liability of the accused will be 07.10.2004. Before proceeding further to ascertain liability of the accused it would be relevant here to appreciate the testimony of CW1. Some of the relevant portions from the testimony of CW 1 are reproduced below:
"The Ex. CW1/2 does not bear the company seal but it has been certified as true copy by the Manager. We have not written anywhere in the complaint that who is the Manager of the company. We have not filed any document on record which shows that the Manager is authorised to certify the documents."
"I cannot say whether blank signed security cheques are obtained by the Loaning Department of the complainant company at the time of execution of hire purchase agreement."
"It is correct that I have no where mentioned in my complaint and affidavit in evidence Ex. C1 as to when the complainant company repossessed the vehicle in question. It is correct that I have no where mentioned in my complaint and affidavit in evidence Ex. C1 as to when the complainant company sold the vehicle in question and for what price."
"Court Ques. Whether the complainant company has sold the vehicle and if yes, at what price?
A. Yes, the complainant company has sold the vehicle in question. The complainant company has sold both the vehicles financed to the accused for a sum of Rs. 21,20,000/- out of the said sum Rs. 13,35,400/- have been adjusted towards the vehicle in question. "
"No notice of arbitration was given to the accused person. It is correct that as per clause 3 iii (a) of the hire purchase agreement Ex. CW1/3, the arbitration proceedings shall be invoked. At this stage the witness is confronted with Ex. CW1/4 and witness submits that the notice for arbitration has not been sent to the accused. The agreement Ex. CW1/3 is terminated when the entire total financed amount alongwith interest is recovered from the accused. At this stage, witness is confronted with para 5 of Ex. CW1/3."
"All the EMIs pertaining to the hire charges of the vehicle in question were given in cash only. No EMI whatsoever was received by way of cheque. The cheque amount in question i.e. Rs. 2,51,379/- is inclusive of future installments till 35th installment i.e. May, 2006 and other overdue charges till the date of cheque i.e. 04.08.05. The cheque amount in question i.e. Rs. 2,51,379/- is exclusive of amount Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 10/15 Judgment dated 04.04.2013 realised after selling vehicle in question. It is correct that the cheque amount also includes the installments due after the repossession of the vehicle."
"I cannot show from record any document to prove when and to whom and for what price the above said vehicle bearing no. HR47C7752 was sold."
"I am not aware whether the said cheque alongwith three other cheques including cheque no. 419742 was ever given to Sh. Ranjeet Singh, Manager of Libra Finance at the time of execution of the loan agreement and it was never given for presentation in any bank. Vol. Sh. Ranjeet Singh is Manager of Libra Finance, Libra Leasing and Libra Finance and Carriers Pvt. Ltd. I am not aware whether it was promised by Sh. Ranjeet Singh that the cheque in question alongwith other cheques would be returned to the accused upon paying the last installment or at the time of repossession of the vehicle."
"I do not know whether the cheque was issued in discharge of any debt or liability. I do not know whether on the date of cheque there was any legally enforceable debt/liability or not."
18. The complaint, affidavit in chief of CW1, notice Ex. CW1/4, notice Ex. CW1/8 all admit that the vehicle has been sold by the complainant after repossession. But the value of the sale is not disclosed anywhere in the aforesaid record. The amount realized from the sale of the vehicle was for the first time disclosed by CW1 in court question put on 26.05.2012. No document have been filed by the complainant on record to show that the vehicle in question has been sold for a sum of Rs. 13,35,400/-. No document has been brought on record to show the mode of sale of vehicle and to whom the vehicle has been sold. CW1 has also expressed his ignorance about this aspect. No statement of account has been filed by the complainant on record to show the liability of the accused on 07.10.2004 (date of repossession) and on the date of cheque after adjustment of the sale proceeds. Moreover CW1 in his statement has stated that the cheque amount in question is inclusive of future installments till 35 th installment i.e. it includes the installment due even after the repossession of the vehicle. I am afraid that the complainant is barred under law to charge future Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 11/15 Judgment dated 04.04.2013 installment from the accused after repossession of the vehicle in case hire purchase agreements. However, the complainant may avail the civil recourse by filing claim for damages on termination of the contract. But it is very clear that the future installments after termination of the contract and repossession of the vehicle cannot be charged from the accused in hire purchase transaction.
19. In the case of Sudha Beevi vs State Of Kerala, 2004 CriLJ 3418 it was held that:
"16. Section 43 of the Negotiable Instruments Act deals with a negotiable instrument made without consideration. Relevant portion of the section reads thus:
"43. Negotiable instruments made, etc. without consideration :- A negotiable instrument made, drawn accepted, endorsed, or transferred without consideration, or for a consideration which fails, creates no obligation of payment between the parties to the transaction.......".
If a negotiable instrument is made or drawn without consideration, it creates no obligation of payment between the parties to the transaction. Similarly, if the consideration for which the instrument was made or drawn has failed subsequently, then also the instrument creates no obligation at all. Therefore, if the hire purchase agreement in this case between the owner and the hirer had stood determined by act of parties, the cheques which were accepted by the owner in advance for re-payment of the hire would become instruments without consideration; or in other words, they will be instruments for which consideration had failed. Then the remedy available to the owner is to realise the balance hire due from the hirer or to sue for damages for breach of the terms of the agreement.
28.I am also inclined to agree with the contention that once the financier/owner under hire purchase agreement exercised the option of seizure of the vehicle, the post dated cheques obtained from the hirer cannot be presented for encashment after the seizure. The owner has to take recourse to other legal remedies for recovery of the balance amount. If and when the vehicle is sold subsequently, the owner can recover the balance amount after adjusting the sale proceeds of the vehicle. Of course, in the post seizure scenario, it may be open to the parties to agree upon a new schedule of payment or restructuring of the hire transaction."
20. In M.Sajjan Raj Nahar vs Mr. A. Balasubramaniam, (2007) 2 MWN (cri) DCC Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 12/15 Judgment dated 04.04.2013 50 Hon'ble High court of Madras held that:
"5.Now the point for determination in this appeal is whether Ex.P.2- impugned cheque was drawn by the accused to discharge a subsisting debt to warrant conviction against the accused under Section 138 of the Negotiable Instruments Act?
6.The Point: The learned trial Judge while dismissing the complaint has given a valid reason in his judgment at para 16. Ex.P.12 is the statement of accounts on which the complainant had placed his reliance to show that on the date of drawal of Ex.P.2-cheque by the accused, there was a balance of Rs.3,53,000/- under Ex.P.8, higher purchase agreement entered into between the complainant and the accused. It is the admitted case of the complainant that since the accused had committed default in payment of the instalments under Ex.P.8, higher purchase agreement, the bus bearing registration No.KL-9B-846 was seized after issuing Ex.P.9- notice and the same was sold in public auction to one George, who had issued Ex.P.11-voucher dated 12.9.1997 for having purchased the bus bearing registration No.KL-9B-846 for a sum of Rs.2 lakhs. It is the case of the complainant that even after adjustment of this Rs.2 lakhs, the sale proceeds of the bus under Ex.P.11, towards the balance due from the accused to the complainant, still here is balance of a sum of Rs.3,53,000/- as per Ex.P.12 and only to discharge the balance amount after the said adjustment, the accused had drawn the impugned cheque Ex.P.2. But if the said sum of Rs.2 lakhs under Ex.P.11 was adjusted towards the balance of Rs.3,53,000/- as shown under Ex.P.12, then the balance amount will be Rs.1,53,000/-. But Ex.P.2-cheque was drawn by the accused for a sum of Rs.3 lakhs. Even in the notice under Ex.P.6 no details regarding the balance due under Ex.P.8, higher purchase agreement, was given. Under such circumstances, the complainant cannot take shelter under Section 138 of the Negotiable Instalments Act and it cannot be said that only to discharge a subsisting liability the impugned cheque under Ex.P.2 was drawn by the accused in favour of the complainant as rightly held by the learned trial judge. Under such circumstances, I do not find any reason to interfere with the findings of the learned trial Judge in STC.No.174 of 1998 on the file of the Judicial Magistrate, Metuppalayam. Point is answered accordingly."
21. It is admitted by CW1 that the cheque amount includes the future installment. No document has been filed on record by the complainant showing the sale of vehicle and the adjustment of sale proceedings in hire purchase account. The value, if any, derived from sale of repossessed financed vehicle is neither disclosed and neither proved by Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 13/15 Judgment dated 04.04.2013 complainant on record. No details of payments received from accused has been provided. No statement of account is filed on record. Complainant being an NBFC must have been maintaining the account of accused but has failed to bring on record the same showing the liability of accused. These factors when seen in toto have rebutted the presumption under section 139 Negotiable Instruments Act, 1881 and complainant has failed to show beyond reasonable doubt that accused was liable to pay the cheque amount on the relevant date.
22. Apart from it, the contention raised by the accused that the cheque in question is a security cheque cannot be ignored. CW1 in his testimony has expressed his ignorance as to whether the present cheque along with other cheques was given at the time of execution of loan agreement as a security cheque. CW1 has also expressed his ignorance as to whether the cheque in question was issued in discharge of any debt or liability. He has also stated that he do not know whether on the date of cheque there was any legally enforceable debt/liability or not. Apart from it the complaint's case is based on the premises that the complainant has issued notice dated 13.04.2005 Ex CW 1/4 calling upon accused to pay a sum of Rs. 2,45,796.89/- failing which the matter shall be referred to arbitration. It is stated in the complaint that upon receipt of the said notice accused had approached the complainant and issued the cheque in question. But CW1 in his testimony has categorically admitted that no notice for arbitration was given to the accused person. Even after confronting with notice Ex. CW1/4, CW1 has admitted that the said notice for arbitration has not been sent to the accused.
23. The said admission by CW1 that no notice for arbitration has been issued by the complainant as well as his ignorance as to when and whom the said cheques have been issued probablise the defence of the accused and falsify the story of the complainant that the cheque in question has been issued after issuance of notice dated 13.04.2005 Ex. CW1/4. Therefore the circumstances only leads to the inference that Libra Leasing Vs Jagat Singh CC. No. 2287/12 Page No. 14/15 Judgment dated 04.04.2013 cheque was given at the time of execution of agreement as blank security cheque. This fact also gets fortified by the testimony of DW1. On the basis of the aforesaid facts and circumstances, I do not find any merit in the complaint. The complainant has failed to establish its case beyond reasonable doubt and accused is acquitted and set at liberty.
24. Before parting with this judgment, I would like to make a reference to the testimony of CW1 wherein he has stated that "All the EMIs pertaining to the hire charges of the vehicle in question were given in cash only. No EMI whatsoever was received by way of cheque." The EMIs in present case is of Rs. 46,000/-. The section 269 SS of Income Tax Act, 1961 mandates that no payment/deposit above Rs. 20,000/- shall be made in cash. The said provision has been introduced by the legislature with the intention to curb the flow of black money in the economy. From the admitted testimony of CW1it is clear that complainant is receiving EMIs for more than Rs. 20,000/- by way of cash and not by way of cheque/DD. I am of the considered opinion that this irregularity should be curbed, regulated and checked upon by the Income Tax Authorities. Copy of judgment be sent to the Department of Income Tax, Delhi and the RBI for necessary information, investigation and legal action at their end as per law.
File be consigned to record room as per rules.
Announced in the open (ABHILASH MALHOTRA)
court on 04.04.2013 MM-06/Dwarka Courts,
New Delhi/04.04.2013
Libra Leasing Vs Jagat Singh
CC. No. 2287/12 Page No. 15/15
Judgment dated 04.04.2013