Delhi District Court
Complainant vs Rishi Singhal Prop. M/S Singhal Son ... on 23 July, 2012
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IN THE COURT OF SH. PAWAN KUMAR ,
METROPOLITAN MAGISTRATE, SPECIAL COURT10,
DWARKA COURTS, NEW DELHI.
CC NO14435/09
STANDARD CHARTERED BANK
Having its Branch office at:
First Floor, Express Building,
910, Bahadur Shah Zafar Marg, New Delhi110002
And also at:
10, Parliament Street, New Delhi110001
Through its Attorney / Authorized Representative
Syed Kausar Abbas
...... COMPLAINANT
VERSUS
Rishi Singhal Prop. M/s Singhal Son Forms
M384, First Floor,
Guru Harkishan Nagar,
Paschim Vihar, New Delhi
And also at:
M384 F.F. Guru Harkishan Nagar,
Paschim Vihar Delhi110087
..... ACCUSED
P.S.: Parliament Street
U/S:138 N.I.Act
CC No.14435/09 1 of 15
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a) Sl.No. of the case :14435/09
b) Date of commission of offence :05.07.2009
c) Name of the complainant :Standard Chartered
Bank
d) Name of the accused ,and
his parentage and residence :Rishi Singhal Prop.
M/s Singhal Son Forms
M384, First Floor,
Guru Harkishan Nagar,
Paschim Vihar, New
Delhi
e) offence complained of : Section 138 N.IAct.
f) Plea of accused : Pleaded not guilty and
claimed trial.
g) final order : Accused found guilty
and convicted for
commission of offence
U/S 138 N.I. Act
h)date of such order : 23.07.2012
Date of institution of the complaint : 29.07.2009
Date of Reserving the judgment : 20.07.2012
Date of pronouncing the judgment : 23.07.2012
CC No.14435/09 2 of 15
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J U D G M E N T
1. The present complaint is filed u/s 138 Negotiable Instrument Act (in short "N.I Act") filed by Standard Chartered Bank "Financial Institution" before this court which is a special court constituted for dealing exclusively with criminal complaints relating to dishonour of the cheque instituted by "Financial Institution" only.
2. The complainant version in brief is that the accused had availed a Business Installment Loan facility from the complainant bank by entering into loan agreement number 47225327. In discharge of part of the debts incurred by accused on account of dues, the accused issued the cheque bearing no. 160851 dated 18.04.2009 for Rs. 89,755/ drawn on Oriental Bank of Commerce. The said cheque when presented for encashment returned by bank with the remarks "Payment Stopped by Drawer" vide bank returning memo dated 03.06.2009. Thereafter the complainant issued a legal notice dated 20.06.2009 to the accused demanding the cheque amount in question, and the same was posted on 20.06.2009 through UPC and registered post. As per the complainant, despite the expiry of statutory 15 days period from the date of receipt of the notice, the accused failed to make the payment of the cheque in question.
CC No.14435/09 3 of 15 4 Thus, present complaint was filed on 29.07.2009.
3. The complainant tendered his presummoning evidence by way of affidavit which is Ex Cw 1/1. Along with the affidavit complainant also relied upon documents which are EX CW 1/A to EX CW 1/F6. After considering the material on record the accused was summoned on 25.09.2009. The accused appeared in the court on 16.04.2010 and was admitted to bail.
4. Notice u/s 251 Cr.P.C. was framed against the accused on 04.05.2010. At the time of framing of notice the accused denied the receipt of legal notice in question. The accused pleaded not guilty and claimed trial and thereafter the matter was posted for complainant evidence.
5. During the trial the complainant examined only one witness CW1, Sh. Khalid Saifullah, the Authorized Representative of the complainant Bank. Further it is provided U/S 145 N.I. Act that the complainant can give his evidence by way of affidavit. The complainant in his evidence tendered his affidavit in post summoning evidence and relied on the documents already placed on CC No.14435/09 4 of 15 5 record along with the complaint. The affidavit of CW1 is exhibited as Ex. CW1/1. Power of Attorney of the AR is Ex. CW1/B1. Further original cheque in question is exhibited as CW1/C. The cheque returning memo is exhibited as CW1/D. Office copy of the legal notice is exhibited as CW1/E. The postal Receipts and UPC are exhibited as CW1/F1 to CW1/F6.
6. The crossexamination of the A.R / CW 1 Sh. Khalid Saifullah, revolve mainly pertains to the issues whether the cheque in question is one of the 36 security cheques issued at the time of disbursement of loan and whether the accused had intimated to the complainant that due to recession he could not repay the loan amount and requested not to present the cheques in his account.
7. No other witness was examined by the complainant and the complainant's evidence was closed on 01.02.2011.
8. 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 admitted the loan. He also stated that the cheque in question is one of the 36 blank signed security cheques issued at the CC No.14435/09 5 of 15 6 time of sanctioning of loan. It is further stated that he did not receive any legal demand notice about the dishonoring of the cheque in question. It is further stated that he had intimated the complainant bank not to present the cheque in question as he could not maintain the payment discipline due to financial crisis.
9. In the defence the accused examined himself as DW1 . In his deposition the accused stated that he had already sent written request to the complainant company not to present the cheque in question and relied on copy of letters and reminders and same are taken on record as Mark DX(colly.). The accused did not lead any other evidence and defence evidence was closed on 27.06.2012.
10. Ld. Counsel for the Complainant argued that they have satisfied every ingredients of offence U/S 138 N.I. Act.. It is further argued that in his defence evidence, the accused has admitted the factum of taking loan from the complainant. It is contended on behalf of the complainant that the issuance of the cheque in question is not disputed or denied on the part of the accused. It is further contended that accused has failed to rebut the presumption as contemplated by Section 118 (b) and 139 N.I Act. It is further CC No.14435/09 6 of 15 7 argued by Ld. Counsel for the complainant that in any case the accused was supposed to maintain sufficient balance for the installments which he was admittedly supposed to pay.
11. The counsel for the accused has argued that the cheque in question was issued as the security cheque at the time of disbursement of loan. The cheque in question was not issued in discharge of any debt or liability. It is further argued that the complainant company presented the cheque in question despite written request not to present the cheque in question and that too without any prior intimation. It is argued that the accused did not receive any legal demand notice from the complainant.
12. At this stage it would be necessary to see the effect of statutory presumption under section 118 and section 139 N.I. Act in order to judge the legal and factual merit of the defence's contention.
Section 118 and 139 of N.I.Act, have been dealt with in cantena of judicial pronouncements by the Hon'ble Supreme Court. And it would be sufficient to refer to the following judgments in this regard.
CC No.14435/09 7 of 15 8 In " K. Bhaskaran Vs. Sankaran Vaidhyan Balan"(AIR 1999 SC 3762), it was observed that as the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Sec.118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharges of any debt or liability. The burden was on the accused to rebut the aforesaid presumption.
Thus, the effect of these presumptions is to place the evidential burden on the Accused of proving that the cheque was not received by the bank towards the discharge of any liability.
In this regard it is fruitful to refer to the ratio of the judgment in "M. S. Narayana Menon v. State of Kerala" (AIR 2006 S C 3366) and "Krishna Janardhan Bhat Vs. Dattatraya G.Hegde (2008 A.I.R. (SC) 1325 ), on the point that it is not necessary that the rebuttal is always essentially by leading separate contrary evidence and it would suffice if the accused can demonstrate from the crossexamination of the complainant that the burden to prove contrary is discharged. So far as presumption as to issuance of cheque for consideration and in discharge of debt, the accused need CC No.14435/09 8 of 15 9 not disprove the complainant case in its entirety. He can discharge his burden on the preponderance of probabilities through direct or circumstantial evidence for which he can rely on evidence adduced by the complainant.
But again each case depends on its own facts and circumstances. And now I would examine whether in present case the accused is able to prove successfully to the contrary.
13. It is established on record that the accused entered into loan agreement and availed a business loan from the complainant bank vide loan account no. 47225327 and the loan was to be repaid in 36 installment of Rs.89755/ each. It is also admitted by the accused that the cheque in question was issued by him after signing it, however the particulars of the same are not filled by him. It is also proved that the cheque in question is presented within six months of date of issuance. It is further proved that on presentation the cheque in question, it returned dishonored vide return memo for the reasons "Payment stopped by drawer".
14. However, receipt of legal demand notice was denied by the accused but it is established by the complainant that the legal demand notice was sent through Registered Post / A.D / UPC at the CC No.14435/09 9 of 15 10 correct address of the accused. The postal receipt of registered post/ A.D and UPC are placed on record as Ex. CW/F1 to F6. Regarding the address on the legal demand notice DW 1/ accused stated in his crossexamination that the address mentioned in the legal demand notice, postal receipts/ A.D/ UPC and on the bailbond belongs to him. However, he stated that the address was sealed by the bank but no documents in this regard are placed on record. Moreover in reply to the Court question, DW 1/ accused stated that on 20.06.2009, my address was the same as mentioned in the legal demand notice. In view of the above facts, it is established that at relevant point of time the accused was residing at the address mentioned in the legal demand notice. On this issue it is very well settled by the Hon'ble Supreme Court in the matter of C.C. Alavi Haji Vs. Palapetty Mohammed & Anr. that if any borrower who claims that he did not receive the notice sent by the complainant can within 15 days of receipt of summons from the court in respect of complaint U/S 138 N.I. Act make the payment of the cheque amount and submit to the court that he had made the payment within 15 days of the notice of summons and therefore the complaint is liable to be rejected. A person who does not pay within 15 days of the receipt of the summons from the court along CC No.14435/09 10 of 15 11 with the copy of the complaint U/S 138 of the Act cannot take the defence that there was no proper service of notice as required U/S 138 of the Act. It was further held that in such cases the court shall take the presumption of section 27 of General Clauses Act and Section 114 of Indian Evidence Act. Hence, it can be presumed u/s 27 General Clause Act r/w section 114 in Indian Evidence Act that in due course regarding legal demand notice was served upon the accused. So, this submission of the accused is not tenable.
15. The defence of the accused in brief is that the accused had availed the business loan from the complainant bank and had paid 1112 EMIs regularly. Due to recession the accused could not make the regular payment and requested the complainant Bank in writing not to present the Cheques of the accused in his account. Further the cheque in question was stated to be one of the 36 Blank signed cheques given for the purpose of security at the time of sanctioning of loan.
16. Regarding the first defence, it is contended on behalf of the accused that due to financial crisis he had written letter to the complainant bank to request not to present the cheques of the accused, which were lying in the custody of bank and the cheque in CC No.14435/09 11 of 15 12 question was presented despite his written intimation. There is no bar U/S 138 Negotiable Instruments Act that the drawee cannot present the cheque even after receiving the instructions / request for not presenting the cheques from the drawer. Therefore the submission of the accused does not appeal to the reason.
The another defence of the accused is that the cheque in question was not issued in discharge of any legally enforceable debt or liability rather it is one of the 36 blank signed security cheques. On this aspect it is argued on behalf of the complainant that the cheque in question was one of the 36 post dated EMI cheques. During crossexamination CW 1/ A.R stated that the EMI amount was approximately Rs.89,000/. CW 1/ A.R voluntarily stated that at the time of loan 36 post dated cheques were issued by the accused to the complainant. He further stated that at present the complainant bank is having 24 post dated cheques issued by the accused. CW 1 / A.R denied the suggestion that 36 cheques issued at the time of loan were security cheques. The DW 1/ accused deposed that at the time of sanctioning of loan he has issued 36 security cheques. He further deposed that he has already sent written request to the complainant company not to present the cheque in question and furnished the copy of letters and reminders CC No.14435/09 12 of 15 13 which are Mark DX (Colly.). DW 1/ Accused further testified that after giving intimation to the complaint he had stopped the payment by writing letters to this bank.
Now the only contentious issue to be decided between the parties is that whether those 36 cheques were given for the purpose of EMI or security. During crossexamination DW 1/ accused stated that he had paid 1112 installments through cheques. Further the 1112 cheques were stated to be among the so called 36 security cheques. DW 1/ Accused denied the suggestion that 36 post dated cheques were given for the payment of EMI and not for the purpose for security. He further stated that no objection was taken on encashment of the cheques for the payment of EMI and further no such complaint was made regarding the misuse of those cheques. Here it is pertinent to mention that the accused relied on the letters and reminders which are Mark DX. Letters are photocopy of the original, however, not objected by the complainant. The letters Mark DX are addressed to the complainant bank and dispatched by the accused. In these letters it is clearly mentioned that in pursuance to the loan in question the accused had issued 36 monthly installments cheques of Rs.89725/ towards the discharge of his own liability. In the same letter it is CC No.14435/09 13 of 15 14 further mentioned that he was maintaining the payment discipline but due to financial crisis is not able to honour the remaining cheques which are lying under the custody of the bank. In view of the above facts it is clear that the cheque in question is one of the post dated EMI cheques.
17. After considering the above discussion, the brief findings are as follows. The complainant successfully established that the accused had availed the loan in question from the complainant company and defaulted in making the payment of the installments. It is further established that the accused had issued the cheque in question, however, the accused contended that the cheque in question was issued for the purpose of security and not in discharge of legally recoverable liability. However, it is brought on record that the cheque in question was one of the 36 post dated EMI cheques. The accused failed to discharge the burden that the cheque in question was not issued for consideration and therefore, could not rebut the presumption under section 118 and 139 Negotiable Instrument Act. The liability of the accused as on the date of issuance of cheque remains unrebutted.
18. Thus, complainant has successfully proved on record CC No.14435/09 14 of 15 15 that the cheque in question was for valid consideration which when presented for encashment got dishonored due to insufficiency of funds and in view of unrebutted receipt of the legal notice, the same is deemed to have been served upon the accused who failed to make the payment of cheque amount within the stipulated period of time of 15 days and hence committed an offence under Sec.138 N. I. Act. Accordingly, the accused is convicted for the offence under Sec. 138 NI Act.
ANNOUNCED IN THE OPEN COURT ON 23.07.2012.
All the pages from 1 to 15 are signed by me.
(PAWAN KUMAR ) METROPOLITAN MAGISTRATE, SPECIAL COURT 10, COURT NO312, DWARKA COURTS, DELHI.
CC No.14435/09 15 of 15