Delhi District Court
Ors. vs . Laddevi & Ors. Air 2007 Rajasthan 166 ... on 30 October, 2013
IN THE COURT OF MS. SUGANDHA AGGARWAL, ACJcumCCJcumARC, NORTH DISTRICT, ROHINI : DELHI Unique Case ID No. 02404R0906012008 Police Station : Samaipur Badli JUDGMENT
(a) Complaint Case 364/2011/2008 No.
(b) Date of offence After fifteen days of service of notice dated 02.01.2008
(c) Complainant M/s Bhushan International Ltd. A Company incorporated under Companies Act having its registered office at 39/23, Gali No.15, Samaypur Industrial Area, Bawana Road, Near Railway Crossing, Delhi - 110042 and Work at 1221, HSIDC Industrial Estate, Rai Distt. Sonepat, Haryana through its duly constituted attorney Shri N.B. Gupta.
(d) Accused Bhagwat Dayal, Son of Late Sh. Sidhu Ram Sharma, R/o D134, Extn. IID, Behind Lokesh Cinema, Nangloi, Delhi.
(e) Offence Under Section 138 of Negotiable Instruments Act, 1881 (f) Plea of accused Pleaded not guilty (g) Final Order Convicted (h) Date of institution 15.02.2008 (i) Date when 21.10.2013 judgment was reserved (j) Date of judgment 30.10.2013 C.C. No. 364/2011/2008 Page No. 1 of 18
1. This is a complaint case filed by the complainant alleging the offence under Section 138 of Negotiable Instruments Act, against the accused.
2. Brief facts of the case, as averred in the complaint, are that the complainant is a Public Limited Company duly incorporated under the Companies Act and Shri N.B. Gupta, one of its Directors is duly authorized to file the present complaint case. It is further contended that the complainant is dealing in manufacturing and marketing of footwears. Accused was also dealing in the business of marketing of footwears. It is contended that accused has purchased goods from the complainant on regular basis and complainant has maintained a running account of the accused. It is contended that as per the said account, a sum of Rs.4,81,630/ was outstanding against the accused as on 18.10.2007. In discharge of said liability, accused issued two cheques bearing no. 023133 dated 22.10.2007 for Rs.2,60,800/ and cheque No.023134 dated 30.10.2007 for Rs.2,20,830/ both drawn on Corporation Bank, Nangloi C.C. No. 364/2011/2008 Page No. 2 of 18 Jat, Delhi.
3. It is averred that the said cheques were dishonoured on presentation with the remarks "Funds Insufficient" vide cheque return memos dated 18.12.2007. The complainant has further averred that a legal notice dated 2.1.2008 was sent to the accused on 3.1.2008 but the accused failed to make the payment of the cheques in question despite service of notice. Therefore the complainant was constrained to file the present case.
4. After examination of the complainant, the accused was summoned for the offence punishable under Section 138 Negotiable Instruments Act.
5. When accused appeared in the Court, complete set of documents were supplied to him. Notice under Section 251 Code of Criminal Procedure for offence under Section 138 Negotiable Instruments Act, was served upon the accused vide order dated 17.10.2011, to which the accused pleaded not guilty and claimed trial.
C.C. No. 364/2011/2008 Page No. 3 of 18
6. Complainant examined himself as CW1. CW1 has filed his affidavit Ex.C1/1 in examination in chief wherein he has reiterated and reaffirmed the contents of the complaint on oath and relied upon the following documents :
(a) Certified true copy of Resolution and Special Power of Attorney as Ex.CW1/A and Ex.CW1/B.
(b) Statement of account as MarkA.
(c) Original cheques in question as Ex.CW1/D and Ex.CW1/E.
(d) Original cheque return memos as Ex.CW1/F and Ex.CW1/G.
(e) Covering letter with return memo dated 19.12.2007 as Ex.CW1/H
(f) Copy of the legal notice dated 2.1.2008 as Ex.CW1/I.
(d) Postal receipts and UPC as Ex.CW1/J and Ex.CW1/K.
(e) Original Regd.AD Card as Ex.CW1/L.
7. CW1 was duly crossexamined on behalf of the accused and discharged. Thereafter, CE was closed.
8. After closure of complainant's evidence statement of the accused Under Section 313, Code of Criminal Procedure was recorded. Entire incriminating evidence was put to the accused. Accused denied the entire C.C. No. 364/2011/2008 Page No. 4 of 18 incriminating evidence and stated that he is innocent and has been falsely implicated in this case. No defence evidence was led by the accused.
9. I have heard arguments addressed by both the parties. Written arguments were also filed on behalf of accused.
10. Ld. Counsel for complainant has argued that accused has given contradictory statements. It is stated that in notice framed under Section 251 of Code of Criminal Procedure, he has stated that he has never received the legal notice but in his statement recorded under Section 313 of Code of Criminal Procedure, he has stated that he has received the legal notice. It is also contended that accused has admitted his signatures on the cheques in question and therefore presumption can be drawn against him. Counsel for complainant has also argued that last balance sheet was filed by the complainant company in the year 2007 and it is only that the company has ceased to operate in 2007 but is in existence even thereafter also.
11. Ld. Counsel for accused has argued that complaint case has C.C. No. 364/2011/2008 Page No. 5 of 18 been filed beyond the limitation period as the same has been filed after 45 days from the date of return memo. It is further contended that as per the contention of CW1, the complainant company has ceased operating in the year 2007 and admittedly the Resolution and Special Power of Attorney Ex.CW1/A and Ex.CW1/B executed in favour of CW1 are dated 13.2.2008. It is argued that if the company has already ceased to operate in 2007 then any power of attorney executed subsequently cannot be held to be a valid power of attorney. Counsel for accused has further argued that neither stock register nor any other document except copy of ledger book are produced by the complainant. It is further argued that legal notice Ex.CW1/I has been sent prior to execution of Special Power of Attorney Ex.CW1/B but in the legal notice, it is stated that it has been sent on behalf of Mr. N.B. Gupta. Hence on the date of sending legal notice, he was not authorized on behalf of company and therefore there is no valid legal notice.
12. I have considered the rival contentions of both the parties and C.C. No. 364/2011/2008 Page No. 6 of 18 have perused the record.
13. As per the case of complainant, certain goods were supplied to the accused and a sum of Rs.4,81,630/ was outstanding against the accused as on 18.10.2007. In discharge of said liability, accused issued two cheques bearing no. 023133 dated 22.10.2007 for Rs.2,60,800/ and cheque No.023134 dated 30.10.2007 for Rs.2,20,830/ both drawn on Corporation Bank, Nangloi Jat, Delhi. The said cheques were dishonoured on presentation with the remarks "Funds Insufficient" vide cheque return memos dated 18.12.2007. The complainant has further averred that a legal notice dated 2.1.2008 was sent to the accused on 3.1.2008 but the accused failed to make the payment of the cheques in question despite service of notice. Therefore the complainant was constrained to file the present case.
14. In order to prove all these contentions, Mr. N.B. Gupta, Director of complainant company has examined himself as CW1. He filed his affidavit Ex.CW1/1 wherein he reiterated and reasserted the C.C. No. 364/2011/2008 Page No. 7 of 18 contents of the complaint on oath. CW1 has been crossexamined at length but nothing material could come during his crossexamination.
15. Counsel for accused has raised certain arguments which are dealt with as under : LIMITATION
16. Counsel for accused has stated that the complaint case is time barred as the same has been filed after 45 days from the date of return memo. As per the provisions of Section 138 of Negotiable Instrument Act, the complaint case is to be filed within one month after the expiry of 15 days given to the accused for making payment after service of legal notice. In the present case, the legal notice is dated 2.1.2008 and the address of accused is of Delhi only. Even if three days are taken for service of legal notice, then the period of 15 days for the accused for making payment will start running from 6.1.2008 which shall expire on 20.1.2008. Now the complainant had to file the present case within one month from 20.1.2008. The present case has been filed on 15.2.2008 C.C. No. 364/2011/2008 Page No. 8 of 18 which is well within time. Hence the said argument of counsel for accused is not tenable.
POWER OF ATTORNEY
17. The next argument raised by counsel for accused is that CW1 has not been duly authorized to file the present complaint case. Firstly, it is argued by counsel for accused that as per the testimony of CW1 himself, the complainant company has stopped operating in the year 2007 and therefore in the year 2008 when the present case was filed, the Special Power of Attorney Ex.CW1/B was not effective. In this regard, counsel for accused has referred to judgment in the case of Prahlad & Ors. Vs. Laddevi & Ors. AIR 2007 Rajasthan 166 wherein it is held that power of attorney being a contract is operative and effective only during the lifetime of donor. It is further held that after the death of donor, the said power of attorney is no more effective. However, in the present case, complainant is a company and the facts of the present case are not similar to facts in the said judgment as in the said case, the Hon'ble High Court C.C. No. 364/2011/2008 Page No. 9 of 18 of Rajasthan has held that power of attorney cease to be effective after the death of the person who is executant of the attorney. Company being a legal entity is different from the same. Further in the present case, the complainant company is still existing and it is only that it has ceased to operate. Hence, in this case, it cannot be said that donor of power of attorney has ceased to exist.
18. Counsel for accused has also referred to the judgment in the case of Janardhan Jaikrishna Vs. Gangaram Mangalchand AIR (38) 1951 Nagpur 313. In the said judgment, the Hon'ble High Court of Nagpur has held that contract of principal and agent will come to an end with the dissolution of firm. It was held in the circumstances of that particular case that contract of agency has come to an end with the dissolution of firm. However, it was further held that it shall depend on the facts and circumstances of each and every case. Therefore, the said principle cannot be implemented in the present case as the factual matrix of the present case is different from the above mentioned case. C.C. No. 364/2011/2008 Page No. 10 of 18
19. Thus I see that in the above quoted judgment also, it has been held that only in case the donor has expired then only the power of attorney is ineffective. In the present case, firstly the executant is the Director of Company which is a legal entity in itself. Further CW1 has categorically stated in his crossexamination that complainant company has only stopped functioning in 2007 but the balancesheet was filed in subsequent year i.e. 200708. Further, during the course of arguments, counsel for complainant has specifically stated that complainant company is still in existence. As per the crossexamination of CW1, it is clear that in the year 2007, complainant company was not operating but from the said deposition it cannot be assumed that the complainant company is dissolved or ceased to exist. If the company which is a legal entity in itself is still in existence, then the power of attorney executed by its Director will also be effective. Hence there is no force in the argument of counsel for accused that special power of attorney Ex. CW1/B executed in favour of CW1 was not effective on the date of institution of the C.C. No. 364/2011/2008 Page No. 11 of 18 present complaint case.
LEGAL NOTICE
20. Accused has taken contradictory stands with regard to legal notice. In notice framed under Section 251 of Code of Criminal Procedure, accused has stated that he has never received the legal notice but in his statement recorded under Section 313 of Code of Criminal Procedure, accused has stated that he has received the legal notice. It is not the case of the accused that the legal notice has been sent on wrong address.
It has been held in the case of Kanwar Pal Vs. Pankaj Gupta 2012 (1) RCR (Rent) 76 (Delhi) that where Notice is sent through registered post with AD on proper address and AD is not received back, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting it by registered post.
21. In the present case also, the address on which legal notice Ex.CW1/I is send is not disputed by the accused and in fact a signed AD C.C. No. 364/2011/2008 Page No. 12 of 18 card has been filed by the complainant.
22. Further the accused has also admitted in his statement under Section 313 of Code of Criminal Procedure that he has received the legal notice. Hence, it is established beyond reasonable doubt that the accused has received legal demand notice Ex.CW1/I.
23. During the course of arguments, Ld. Counsel for accused has raised an objection sating that first paragraph of legal notice Ex.CW1/I shows that same has been sent by Lawyer under instructions and on behalf of Sh. N.B. Gupta. Again the same argument has been raised that legal notice is dated 2.1.2008 and special power of attorney Ex.CW1/B was not effective on the said date as the company has ceased to operate in 2007. It is again argued that hence the legal notice was not sent by a duly authorized person. Firstly, in view of above discussion, that the special power of attorney Ex.CW1/B was effective in 2008 also, therefore, even if Shri N.B. Gupta has authorized a counsel to send the legal notice, the same cannot be said to be invalid. Furthermore, the first three lines of C.C. No. 364/2011/2008 Page No. 13 of 18 legal notice Ex.CW1/I clearly shows that the counsel is sending the legal notice on behalf of complainant company Bhushan International Pvt. Ltd. through one of its Directors Mr. N.B. Gupta. Hence it cannot be said that the legal notice is not a proper notice.
LEGAL LIABILITY
24. Contradictory defence has been taken by the accused. In notice framed under Section 251 of Code of Criminal Procedure and in his statement recorded under Section 313 of Code of Criminal Procedure, accused has stated that he was not the purchaser of the articles from complainant company. He was merely an employee with the complainant company. It is further stated by the accused that cheques Ex.CW1/D and Ex.CW1/E were given as security cheques to complainant which have been misused by the complainant.
25. During the course of arguments, counsel for accused has raised an argument that the complainant company has not placed on record any proof of delivery of goods. It is argued that until and unless it is proved C.C. No. 364/2011/2008 Page No. 14 of 18 that the goods were delivered to the accused, no liability of accused arises to make payment of cheques amount. When the property passes under a contract of sale under the Sales of Goods Act has been argued at length by counsel for accused and he has also referred to the judgments in the cases of State of Madras Vs. M/s Gannon Dunkerley & Co. AIR 1958 SC 560 and M/s New India Assaurance Co. Ltd. Vs. T.H. Devkumar & Ors. AIR 1996 Karnataka 345. However, this is not a civil suit where the Court has to adjudicate whether the property has been transferred with the purchaser and the sale has been completed. This is a case filed under Section 138 of Negotiable Instrument Act wherein the complainant has to merely prove that cheques Ex.CW1/D and Ex.CW1/E were issued by the accused and there was a transaction which has taken place between the complainant and the accused. Complainant has examined CW1 who has reiterated the said fact on oath. CW1 has been crossexamined at length but nothing material could come during the crossexamination of CW1. Certain other arguments have been raised by counsel for accused stating C.C. No. 364/2011/2008 Page No. 15 of 18 that the stock register and other documents have not been produced by the complainant. But for reasons stated above, the said argument is also not relevant.
26. As per the defence of the accused, he was an employee of the complainant and the cheques Ex.CW1/C and Ex.CW1/D were issued as a security cheques. However, accused has not led even an iota of evidence in this regard. In fact, no suggestion was put to CW1 stating that accused was his employee. Accused has admitted his signatures on cheques Ex.CW1/C and Ex.CW1/D. Therefore, presumption under Section 139 of Negotiable Instrument Act can be drawn against the accused. Counsel for accused has referred to the judgment in the case of Krishna Janardhan Bhat v. Dattatraya G. Hegde, 2008 Crl. L.J. 1172 wherein it has been held that the fact that the legally recoverable debt still exists is not a matter of presumption under Section 139 of Negotiable Instrument Act and the same is to be proved by the complainant in the Court. However, in the said judgment, the Hon'ble Supreme Court has held that by virtue of C.C. No. 364/2011/2008 Page No. 16 of 18 Section 139 of Negotiable Instrument Act, a presumption can be drawn in favour of holder of the cheque that the cheque was issued in discharge of legally recoverable debt. With regard to existence of said recoverable debt, even this is not the case of the accused that he has paid the cheque amount. This is an admitted fact that amount of cheques Ex.CW1/C and Ex.CW1/D has not been paid till date. CW1 by his testimony has proved beyond reasonable doubt that legally enforceable debt still exists. Once the presumption has been drawn against the accused under Section 139 of Negotiable Instrument Act, it was incumbent upon the accused to rebut the same. But no evidence has been led by the accused despite repeated opportunities. Accused has stated that he has not filled the details on the cheques Ex.CW1/C and Ex.CW1/D. But accused has failed to examine any handwriting expert in this regard.
27. In view of above discussion, I am of the considered opinion that the complainant has proved his case beyond reasonable doubt. Accordingly, accused is convicted for offence under Section 138 of C.C. No. 364/2011/2008 Page No. 17 of 18 Negotiable Instruments Act, 1881.
(SUGANDHA AGGARWAL) ACJcumCCJcumARC, North District, Rohini, Delhi Announced in the open Court on this 30th day of October, 2013 C.C. No. 364/2011/2008 Page No. 18 of 18