Delhi District Court
Satin Credit Care Network Ltd vs Shyam Sunder on 21 September, 2012
IN THE COURT OF SH. AKASH JAIN, METROPOLITAN
MAGISTRATE (NI ACT)01, DWARKA COURTS, NEW DELHI.
CC NO 331/12
Unique case ID no. : 02405R0293942010
Satin Credit Care Network Ltd.
Having its registered office at :
306, Lusa Tower, Azadpur, Commercial
complex, Delhi110033.
Through its Authorized Representative :
Sh. Shyam Sunder, Officer (Legal) ............ COMPLAINANT
VERSUS
Shyam Sunder
S/o Ganesh Lal
R/o 218, Ghee Mandi,
New Delhi55.
Also at,
Shyam Sunder
C/o M/s Aishwarya Export & Import,
646, Fancy Cloth Market, Main Bazar,
Pahar Ganj, New Delhi55. ....................... ACCUSED
P.S.: Adarsh Nagar
U/S:138 N.I.Act
a) Date of institution : 12.05.2010
b) Date of reserving the judgment : 04.09.2012
c) Date of pronouncement of judgment : 21.09.2012
d) Offence complained of : Section 138 of Negotiable
Instruments Act.
CC NO. 331/12 Page no. 1 of 19
e) Plea of accused : Pleaded not guilty and claimed
trial.
f) Final Judgment : Convicted
: JUDGMENT :
1.Vide this judgment, I shall dispose of the present complaint filed by the complainant Satin Credit Care Network Ltd. u/s 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as the 'NI Act') against the accused Shyam Sunder.
2. Factual matrix of the case as per complainant is that the complainant is a company duly registered with the Registrar of companies as per provisions of Indian Companies Act, 1956. Complainant is registered as Non Banking Financial Institution with RBI and is involved in the business of leasing and financing the vehicles, consumer durable goods and personal loan to its clients under monthly or daily installments collection schemes on mutually agreed terms and conditions. It is averred that the accused approached the complainant company for obtaining personal loan and on request made by the accused, the complainant sanctioned and disbursed the loan for a sum of Rs.61,200/ in favour of the accused in terms of personal loan agreement no. F8820 dated 17.10.2007. The payment schedule under the said agreement was on the basis of daily installments of Rs.170x360 days. It is stated that the accused after making initial payments towards CC NO. 331/12 Page no. 2 of 19 daily installments, started committing defaults in payments of EDIs.
3. It is alleged that despite repeated reminders and requests made by the complainant, the accused kept on avoiding the payments of EDIs with malafide intention. While scrutinizing the account details of the accused, it was noticed by complainant that it was entitled to recover a sum of Rs.1,21,280/ from the accused. Accordingly a notice dated 15.02.2010 was issued by the complainant to the accused for payment of outstanding amount. The accused after receiving the said notice came and settled the matter with the complainant for a sum of Rs.1,21,280/.
4. It is averred that in discharge of his legal liability towards the complainant, the accused accordingly issued a cheque bearing no.592138 dated 09.03.2010 for a sum of Rs.1,21,280/ drawn on Allahabad Bank, Paharganj, New Delhi58 in favour of the complainant company. However, the said cheque when presented for encashment by the complainant was dishonoured by the bankers of accused for the reasons "Funds Insufficient"
vide returning memo dated 19.03.2010. Thereafter, the complainant company sent a legal notice dated 25.03.2010 through registered post and UPC at the address of the accused intimating him about the dishonour of the cheque in question and calling upon him to pay the amount covered by the cheque within 15 days of receipt of the said notice. The accused though CC NO. 331/12 Page no. 3 of 19 failed to make any payment within stipulated period of time. Hence, the present complaint.
5. Perusal of the record shows that the present complaint was received by way of assignment by this court on 12.05.2010. On the basis of pre summoning evidence led by the complainant on 26.05.2010, Ld. Predecessor Court took cognizance of the offence under Section 138 of NI Act against the accused and issued summons against him on 20.07.2010. Upon service of the summons, the accused entered his appearance before the court and was admitted to bail on 28.02.2011. Thereafter, on 20.09.2011, notice u/s 251 Cr.P.C. was served upon the accused by Ld. Predecessor Court, to which accused pleaded not guilty and claimed trial. The matter was then fixed for evidence.
6. The complainant in support of its case examined Sh. Shyam Sunder, AR of the complainant as CW1 who adopted his pre summoning evidence by way of affidavit Ex. CW1/1 in his post summoning evidence. CW1 placed reliance upon following documents as under : Ex. CW1/A : Copy of extract of board resolution dated 31.01.2009 Ex. CW1/B : Cheque bearing no.592138 dated 09.03.2010 Ex. CW1/C : Return memo dated 19.03.2010 CC NO. 331/12 Page no. 4 of 19 Ex. CW1/D : Statement of account of accused Mark A : Copy of GPA dated 07.03.2009 Mark B (colly) : Copy of certificate of incorporation Mark C : Copy of NBFC certificate of RBI Mark D : Copy of loan agreement dated 17.10.2007 Mark E (colly) : Copy of legal notice and postal receipts.
7. CW1 was duly crossexamined by the counsel for accused. Thereafter, complainant's evidence was closed. Statement of accused under Section 313 Cr.P.C. was consequently recorded wherein all the incriminating circumstances were put to the accused. The accused admitted to have obtained a loan of Rs.50,000/ from the complainant company. Accused further admitted to have issued the cheque in question to the complainant. However, he stated that the said cheque was handed over by him to the official of complainant Mr. Deepak as blank without filling any amount as security for repayment of the loan obtained from the complainant. The accused denied the service of legal notice allegedly issued against him by the complainant. Thereafter, the matter was fixed for defence evidence. The accused got examined himself as a defence witness and recorded his statement in chief and deposed that he took a loan of Rs.50,000/ from the complainant on 17.10.2007. The representative of complainant namely Mr. Deepak came to the shop of accused on 17.10.2007 CC NO. 331/12 Page no. 5 of 19 and got the loan agreement executed by the accused and he handed over one blank signed cheque to the representative of complainant as security at the time of execution of loan agreement and agreed to repay the said amount to the complainant in 360 installments of Rs.170/ each. DW1/ accused further deposed that he did not receive any legal demand notice from the complainant and no settlement had been arrived at between him and the complainant on 09.03.2010. DW1 deposed that representative of complainant Mr. Deepak used to visit his shop daily to collect daily installments. DW1 further deposed that he had paid an approximate sum of Rs.3000/ to 4000/ to Mr. Deepak by way of daily installments and also an additional sum of Rs.6000/ on account of alleged personal exigency in his family. It is stated that Mr. Deepak assured that the said amount shall be adjusted in the daily installments payable by him. However, later on Mr. Deepak stopped coming to his shop for collecting loan installments. Also, no other representative of complainant visited his shop thereafter for collecting the remaining outstanding loan amount. DW1 got duly cross examined and discharged. Matter was then fixed for final arguments and both the parties addressed their arguments at length.
8. Before appreciating the evidences and arguments of both the parties, it would be apposite to refer to basic ingredients of Section 138 of NI Act which are mentioned herein below: CC NO. 331/12 Page no. 6 of 19
(a) The accused issued a cheque on an account maintained by him with a bank.
(b) The said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability.
(c) The said cheque has been presented to the bank within a period of six months from the date of the cheque or within the period of its validity.
(d) The aforesaid cheque when presented for encashment, was returned unpaid/ dishonoured.
(e) The Payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the Bank regarding the return of the cheque.
(f) The Drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand. The drawer of the cheque shall be deemed to have committed an offence punishable u/s 138 NI Act only when the aforesaid ingredients are satisfied.
9. The drawer of the cheque shall be deemed to have committed an offence punishable u/s 138 NI Act only when the aforesaid ingredients are satisfied. The court shall now deal with each of the aforesaid ingredients to see whether the case against the accused has been proved or not.
10. Whether the cheque in question is issued by the accused or CC NO. 331/12 Page no. 7 of 19 not :
The accused in his plea recorded under Section 251 Cr.P.C. and in his statement under Section 313 Cr.P.C. admitted the fact that the cheque in question bears his signature and that the same was issued by him to the complainant. It is however contended by the accused that the said cheque was given by him to the complainant as a blank signed cheque for security purposes at the time of disbursement of loan. It is also contended that the remaining contents of the cheque were not filled by the accused. Thus, so far as issuance of cheque in question to the complainant and signatures of accused on the cheque are concerned, the same is not disputed by the accused. With regard to the contention of the accused that the remaining contents of the cheque were not filled by him, it is pertinent to refer to Section 20 of NI Act which contains provision regarding "inchoate instrument".
Inchoate stamped instruments - Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in [India], and either wholly blank of having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in CC NO. 331/12 Page no. 8 of 19 which he signed the same, to any holder in due course for such amount; provide that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
11. In Jaipal Singh Rana vs. Swaraj Pal 149 (2008) DLT 682 it was held by Hon'ble Delhi High Court that, "......by putting the amount and the name of payee there is no material alteration on the cheque u/s 87 of the Negotiable Instruments Act. In fact there is no alteration but only adding the amount and the date....."
12. It was further observed in the aforesaid judgment that there is no rule of banking business that the name of the payee as well as the amount should be written by the drawer himself. No law provides that in case of cheques the entire body has to be written by the drawer only (sic). In the case of Ravi Chopra vs. State & another (2008 (2) LRC 118 (del) it was held by the Hon'ble High court that, ".........it is possible for 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 filed by the payee at a subsequent point of time".
13. Also, in the case of D. Atchyutha Reddy vs. State of A.P through CC NO. 331/12 Page no. 9 of 19 Public Prosecutor , 2010(2) RCR 880(A.P) it was held that cheque could be filled up by anybody if it is signed by the account holder of the cheque. It was further held that body of the cheque need not necessarily be written by the accused and it can be in the handwriting of anybody else or typed on a machine, so long as the accused does not dispute the genuineness of the signature on the cheque.
14. From the aforesaid legal propositions, it is amply clear that to fasten criminal liability upon the accused under Section 138 of the Act it is not necessary that body of the cheque must be filled by the accused. What is important is the signature on the cheque which in the present complaint is not disputed by the accused. Hence, it stands proved that the cheque in question was issued by the accused.
15. Whether the cheque in question had been issued in discharge in whole or in part, of any legal debt or other liability: It is deposed by CW1 that accused approached the complainant for obtaining personal loan. A sum of Rs.61,200/ is stated to be payable by the accused on the basis of daily installments of Rs.170x360 days. But, accused after availing the loan facility, defaulted in repayment of loan. Thereafter, in discharge of his liability, the accused issued the cheque in question Ex. CW1/B in favour of the complainant.
CC NO. 331/12 Page no. 10 of 19
16. Accused on the other hand took the defence that he actually took a loan of Rs.50,000/ from the complainant which was repayable in 360 installments of Rs.170/ each. It is contended that the cheque in question was given by him in blank to the complainant as a security for repayment of the loan so obtained. While relying on judgment of Ramakrishna Urban Cooperative Credit Society Ltd. Vs. Rajendra Bhagchand Warma, reported as III (2010) CCR 191 (BOMHC), counsel for complainant contended that cheque given in security for loan amount does not attract liability under Section 138 of NI Act. It is further contended that the loan could not be paid completely as the collection agent of complainant namely Mr. Deepak stopped coming to the shop of accused for collecting remaining installments. The fact that accused took a loan of Rs.50,000/ from the complainant is endorsed by AR of complainant/ CW1 in his cross examination. However, it is clarified by the complainant that after calculating interest on aforesaid amount, total sum of Rs.61,200/ (170x360 days) was repayable by the accused as claimed in the complaint in hand.
17. With respect to contention made by the accused that cheque in question was given by him in blank to the complainant as security, it would be apposite to refer to the provisions of section 118 and 139 of NI Act. Section 118 (a) provides that, unless the contrary is proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been CC NO. 331/12 Page no. 11 of 19 made or drawn for consideration. Under section 139 of NI Act, the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part of a debt or liability. Thus, in complaints under Section 138 the court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused.
18. It is pertinent here to note the case of Hiten P. Dalal Vs. Bratindranath Banerjee, 2001 Crl. L.J 4647 wherein Hon'ble Supreme Court while dealing with sections 138 and 139 of NI Act held that whenever a cheque was issued to the complainant for a specific amount, there is a presumption that it is towards discharge of legally enforceable debt. In the event of dispute, the burden is on the accused to prove that there is no subsisting liability as on the date of issuing of cheque and the proof must be sufficient to rebut the presumption and mere explanation is not sufficient. So, there is obligation on the part of the Court to raise the presumptions under Sections 118 and 139 of the NI Act in every case where the factual basis for raising of the presumption had been established.
19. It is further relevant to note the case of Rangappa vs. Mohan AIR 2010 SC 1898, wherein Hon'ble Apex Court has held that the presumption CC NO. 331/12 Page no. 12 of 19 mandated by S.139 of the Act does indeed include the existence of legally enforceable debt or liability. This is of course in the nature of rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested.
20. So it is quite clear from the above that there is an initial presumption in favour of the complainant that the cheque has been received in discharge of debt or liability which needs to be rebutted by the accused to prove his case. In the present complaint, accused has cross examined the complainant witness but nothing material could be culled out by him which can advance his cause.
21. In order to rebut statutory presumptions u/s 139 and 118 of NI Act accused had to prove that there was no subsisting liability of cheque amount in question on the date of issuance of cheque and the proof should be sufficient to rebut the presumptions and mere submission is not sufficient. The accused however has failed to place on record any cogent piece of evidence to show that there was no subsisting liabilities of the accused towards the complainant. The accused claims to have paid a sum of Rs.3,0004,000/ to the official of complainant in addition to a sum of Rs.6,000/ qua which no receipt/ proof is furnished on record by the accused. Accused admitted in his crossexamination that Rs.61,200/ in total CC NO. 331/12 Page no. 13 of 19 was payable by him to the complainant but the remaining balance was not paid by him as representatives of complainant stopped visiting his premises to collect daily installments. Ex. CW1/D clearly evinces outstanding liability of cheque amount in question against the accused on the date of issuance of cheque. It further shows that accused till date only paid a sum of Rs.3,200/ to the complainant. Mere assertion made by the accused that officials of complainant stopped visiting his shop to collect daily installments and that no outstanding liability upto the extent of cheque amount in question was due against him, is of no consequence. In response to the judgment relied upon by counsel for accused i.e. Ramakrishna Urban Cooperative Credit Society Ltd. Vs. Rajendra Bhagchan (Supra), it is stated that the facts of the abovesaid case are not similar to the facts of case in hand. It was incumbent upon the accused to prove first that the cheque in question was given as security to the complainant at the time of grant of loan to him. In the absence of any cogent evidence produced on behalf of the accused, it is held that the accused failed to rebut the statutory presumption u/s 118 & 139 of NI Act and that the cheque in question Ex. CW1/B was issued and drawn in discharge of legal liabilities of the accused and for due consideration.
22. Whether the cheque in question was presented to the bank within the period of its validity: CC NO. 331/12 Page no. 14 of 19 Perusal of the record reveals that the cheque in question Ex. CW1/B dated 09.03.2010 got dishonoured vide cheque returning memo which is Ex. CW1/C which clearly shows that the cheque had been presented within period of its validity i.e. within six months from the date of its issuance. The accused also has not disputed the said fact, as such, it stands proved beyond doubt that cheque in question was presented for encashment within stipulated period of time.
23. Dishonour of cheque on presentation: CW1 has proved cheque returning memo Ex.CW1/C vide which cheque in question was returned dishonoured on its presentation with the remarks "Insufficient Funds". The accused has admitted the above said fact in his statement u/s 313 Cr.P.C. Thus this fact also stands proved beyond doubt that cheque was dishonoured on the ground of "Insufficient Funds".
24. Service of legal notice of demand upon the accused: The accused, during recording of his plea under Section 251 Cr.P.C. admitted the factum of receipt of legal demand notice upon him. Counsel for accused though argued that the said submission was inadvertently recorded due to typographical mistake by the steno. Perusal of record shows that legal demand notice Mark E (colly) was duly sent to the accused on following address :
CC NO. 331/12 Page no. 15 of 19
Shyam Sunder
S/o Ganesh Lal
R/o 218, Ghee Mandi,
New Delhi55.
Also at,
Shyam Sunder
C/o M/s Aishwarya Export & Import,
646, Fancy Cloth Market, Main Bazar,
Pahar Ganj, New Delhi55.
Perusal of the bail bond furnished by the accused and vakalatnama filed by the counsel for accused reveals that the residential address of accused in legal notice dated 25.03.2010 is identical and same with the address given in the said bail bond and the vakalatnama.
25. At this juncture, it would be pertinent to refer to Section 27 of the General Clauses Act which reads as under:
"S.27 Meaning of service by post Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different 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 CC NO. 331/12 Page no. 16 of 19 delivered in the ordinary course of post."
26. The Hon'ble Supreme Court in "K. Bhaskaran vs. Sankarn Vaidhyan Balan" (supra), has held as under:
"........(24) No. doubt Section 138 of the Act does not require that the notice should be given only by "post".
Nonetheless the principle incorporated in Section 27 (quoted above) can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such nonservice. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice.........."
27. Also, it is well settled in the case of CC Alavi Haji vs. Palapetty Muhammed and Anr., (2007) 6 Supreme Court cases 555 that, " .............. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complainant under Section 138 of Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court along with the CC NO. 331/12 Page no. 17 of 19 copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under section 27 of the General Clauses Act and Section 114 of the Evidence Act ....."
28. Hence, in view of the aforesaid legal propositions and evidence on record, it is held that the statutory demand notice was sent to the correct address of the accused by the complainant and therefore legal demand notice is deemed to be served upon the accused.
29. Drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice: It is evident that the drawer has failed to make the payment of the cheque amount in question within 15 days of the receipt of the aforesaid notice, thus, the present complaint u/s 138 NI Act has been initiated against the accused. This fact, thus also stands proved.
30. Final Order :
In view of the above mentioned observations, all the ingredients of the offence under Section 138 NI Act are squarely made out in the present case. The complainant has successfully discharged its burden of proving its case whereas the accused has failed to rebut the presumption that the CC NO. 331/12 Page no. 18 of 19 cheque in question was not issued towards a legally recoverable debt or liability and that the legal notice under Section 138 NI Act was never received by him. Further, the accused has admitted the fact of taking loan from the complainant and issuance of cheque in question to the complainant. In view of the evidence adduced, documents put forth and arguments of both the parties, the accused Shyam Sunder is hereby convicted for the offence under Section 138 N.I. Act. Let the copy of this judgment be supplied to the accused free of cost.
Be heard separately on point of sentence.
Announced in the open (AKASH JAIN) Court on 21.09.2012 MM01 (NI Act) Dwarka Courts, New Delhi CC NO. 331/12 Page no. 19 of 19