Delhi District Court
17. In Baker Oil Tools (India) Pvt. Ltd. vs Baker Hughes Ltd. & Anr, on 9 September, 2013
IN THE COURT OF SH. GAGANDEEP JINDAL,
METROPOLITAN MAGISTRATE (NI ACT)- 12, DWARKA COURTS,
NEW DELHI
Sree Gokulam Chit and Finance Co. Pvt. Ltd.
Versus
Ajay Sehgal
U/s : 138 Negotiable Instruments Act
1. Serial No./CC No. of the case : 2977/12
2. Name of the complainant : Sree Gokulam Chit and Finance Co. Pvt. Ltd.
Having its Branch Office at :
1-E/18, First Floor,
Jhandewalan Extn.,
New Delhi.
3. Date of Institution : 20.07.2012
4. Name of the accused, his : Ajay Sehgal
parentage and residence S/o Sh. S.S. Sunder,
R/o C-26A, Chanakya Place-I
Near C-1, Janakpuri,
New Delhi.
5. Date when judgment was : 05.09.2013
reserved
6. Date when judgment was : 09.09.2013
pronounced
7. Offence complained of and : Offence Under Section 138 of Negotiable
proved Instruments Act
8. Plea of accused : Accused pleaded not guilty and claimed trial
9. Final Judgment : Acquitted
CC No. 2977/12 Page 1 of 10
-:J U D G M E N T:-
1. Vide this judgment, I shall decide the present complaint filed by the
complainant Sree Gokulam Chit and Finance Co. Pvt. Ltd. Under Section 138 of
Negotiable Instruments Act (hereinafter referred to as N.I Act) against the
accused Ajay Sehgal.
2. In the present complaint, it is submitted that accused had approached
the complainant for becoming a member of the chit group bearing no.
G2G/0902/14 and he gave the bid to the chit subscribed in the aforesaid group
and was declared the prized subscriber. It is further submitted that accused had
duly received the payment from the complainant company after deducting the bid
amount and upon executing the necessary chit documents in favour of the
complainant company. It is further submitted accused after making some
installments became irregular in making the payment of the remaining
installments towards the chit amount. It is further submitted that the accused to
discharge his liability has issued the cheque bearing no. 663128 dated
18.05.2012 for a sum of Rs. 1,45,300/- drawn on Vijaya Bank, Gopinath Bazar,
Delhi Cantt., New Delhi in favour of the complainant. It is further submitted that
when the said cheque was presented by complainant with its banker for
encashment, same was returned unpaid by the Drawee Bank with the returning
memo dated 22.05.2012 for the reason "Exceeds Arrangement". Thereafter, the
complainant sent a Legal Notice dated 01.06.2012 through Speed Post AD/UPC
calling the accused to make the payment of dishonoured cheque. It is further
submitted that despite receipt of said notice, accused failed to remit the
aforesaid amount within the stipulated period of 15 days, thereby committing the
offence Under Section 138 of N.I Act for the prosecution of which the present
complaint has been filed.
CC No. 2977/12 Page 2 of 10
3. After considering the material on record, the cognizance of the
offence U/s 138 of N.I Act was taken and accused was summoned on
31.07.2012. The accused appeared in the court on 03.09.2012 and was admitted
to bail.
4. Notice U/s 251 Cr.P.C. was framed against the accused on
05.10.2012. At the time of framing of notice, the accused pleaded not guilty &
claimed trial.
5. The complainant has examined Sh. Rajeev Sharma, Authorized
Representative as CW1. CW 1 has filed his evidence by way of affidavit Ex.
CW1/A and relied upon the following documents : - (A) Copy of the power of
attorney is exhibited as Ex. CW1/1. (B) Original cheque in question is exhibited
as Ex. CW1/2. (C) The cheque returning memo is exhibited as Ex. CW1/3.
(D) Office copy of the legal notice is exhibited as Ex. CW1/4. (E) Postal
Receipts/AD Card is exhibited as Ex. CW1/5 (Colly.). (F) Statement of
account of the accused duly maintained in the regular course of business is
exhibited as Ex. CW1/6.
6. No other witness has been examined by the complainant and the
complainant evidence was concluded on 03.11.2012.
7. 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 fact
of subscribing the chit fund in question and submitted that he had issued the
cheque in question but the same was blank and was issued at the time of
releasing the chit fund by the complainant. He further submitted that he is not
liable to make the payment of Rs. 1,45,300/-. He further submitted that he had
already paid more than Rs. 2,00,000/- to the complainant. He further submitted
that complainant had issued a chit in the name of his cousin namely Rajeev
kapoor as per settlement with him but he had not received any amount of the chit
CC No. 2977/12 Page 3 of 10
in the name of Rajeev Kapoor. The accused denied the receipt of legal demand
notice but admitted that given address as correct and submitted that he had
been living at the given address since last 20 years.
8. The accused has examined Sh. Rajesh Kumar, Peon, Vijaya Bank,
Gopinath Bazar, Delhi Cantt., Delhi as DW 1, Ms. Shalini Mathur, Assistant
Manager, South Indian Bank, A-1/177, Janakpuri, New Delhi-110058 as DW 2,
Sh. Rajeev Kapoor, S/o Sh. Vinod Kapoor as DW 3 and himself U/s 315 Cr.PC
as DW 4.
9. DW 1 has relied upon the certified copy of statement of account of
accused of the accused which is exhibited as Ex. DW1/1, letter dated 12.12.2012
alongwith image of the cheque sent for CTS Clearing which is exhibited as Ex.
DW1/2 (Colly.), letter dated 07.02.2013 issued by Vijaya Bank is exhibited as Ex.
DW1/3. DW 1 was discharged after cross-examination.
10. DW 2 has relied upon the certified copy of the statement of account of
complainant which is exhibited as DW2/1 and letter dated 08.01.2013 issued by
South Indian Bank is exhibited as Ex. DW2/2 (Colly.). DW 2 was discharged
after cross-examination.
11. DW 3 has relied upon the certain documents i.e. blank signed
cheques and stamp papers which the complainant used to obtain from the
customers at the time of subscription of chit which is exhibited as Ex. DW3/1
(Colly.). DW 3 was discharged after cross-examination.
12. During cross-examination, DW 4 was confronted with application U/s
145 (2) N.I Act which is exhibited as Ex. DW4/C1. DW 4 was discharged after
cross-examination.
13. Vide order dated 05.07.2013, complainant has filed Demand
Promissory Note with Stamp Paper, Agreement for payment of future
subscription, Guarantee Agreement, Receipt of payment, Copy of Board
CC No. 2977/12 Page 4 of 10
Resolution dated 04.11.2006 in response the application U/s 91 Cr.P.C moved
on behalf of accused.
14. Final Arguments on behalf of the both the parties heard.
15. From the arguments of both the parties, following questions for
consideration has arisen :-
QA. Whether the present case has been filed by properly
authorized person on behalf of complainant or not ?
QB. Whether the accused has issued cheque in question to
discharge his liability against the chit fund in question ?
QC. Whether the accused has received the Legal Demand
Notice or not ?
16. Question No. A :
The Ld. Counsel for the complainant had argued that the present
complaint is filed by Sh. Rajeev Sharma who is duly authorized by the
complainant vide General Power of Attorney dated 04.12.2008 Ex. CW1/1.
On the other hand, Ld. Counsel for the accused has argued that it is
mentioned in Ex. CW1/1 that Sh. Rajeev Sharma is appointed attorney by the
complainant company by a resolution passed by the board of directors meeting
held on 06.10.2008 but the complainant has not filed the said resolution rather
filed a copy of extract from the Minutes of the Proceedings of the Board of
Directors Meeting held on 04.11.2006. It is further argued that complainant has
failed to prove the authority of Sh. Rajeev Sharma to institute and pursuing the
present complaint. Therefore, the present complaint is not maintainable.
17. 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
CC No. 2977/12 Page 5 of 10
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
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."
18. As per Section 194 of Companies Act, 1956, Minutes of Meeting kept
in accordance with the provisions of Section 193 shall be evidence of the
proceedings recorded therein.
19. In the present case, the General Power of Attorney Ex. CW1/1 was
CC No. 2977/12 Page 6 of 10
executed in favour of Sh. Rajeev Sharma in terms of the Board Resolution
passed by the Board of Directors of the complainant company in the meeting
held on 06.10.2008. The complainant neither filed the said board resolution nor
produced the Minutes Book. It is only the accused who moved an application
U/s 91 Cr.P.C calling the complainant to file said Board Resolution. Thereafter,
the complainant had filed a photocopy of extract from the Minutes of the
Proceedings of the Board of Directors Meeting held on 04.11.2006 and not
produced the Minutes Book. There is contradiction of date of meeting in the
Power of Attorney Ex. CW1/1 and the photocopy of extract from the Minutes of
the Proceedings of the Board of Directors Meeting held on 04.11.2006.
20. In view of the above discussion, the complainant has failed to prove
the authority of Sh. Rajeev Sharma to file and prosecute the present complaint.
21. Question No. B : .
22. The accused has not denied the execution of chit agreement in
question with the complainant but he raised the defence that he had given the
cheque in question in blank to the complainant for security purpose at the time of
subscription of chit fund and paid the installments after adjusting the amount of
chit fund in the name of his cousin brother Sh. Rajeev Kapoor..
CW 1 has categorically denied the suggestion that the cheque in
question was handed over to the complainant at the time of releasing the chit
amount to the accused. Moreover, the Hon'ble High Court of Delhi in case titled
as M/s. The Jammu & Kashmir Bank Vs. Abhishek Mittal 2012 (1) DCR 189
has held as follows :-
"There is no law that a person drawing the cheque has to
necessarily fill it up in his own handwriting. Respondent has not denied his
signatures on the cheques. Once he has admitted his signatures on the cheques he cannot escape his liability on the ground that the same has not been filled in by him. When a blank cheque is signed and handed over, it means that the CC No. 2977/12 Page 7 of 10 person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. A person issuing a blank cheque is supposed to understand the consequences of doing so. He cannot escape his liability only on the ground that blank cheque had been issued by him."
Therefore, the defence of the accused that the cheque in question was given in blank to the complainant and the contents of the cheque were filled by the complainant without knowledge of the accused is not maintainable.
23. Further, the Hon'ble High Court of Delhi in the case titled as M/s Collage Culture & Ors. v. Apparel Export Promotion Council & Anr. 2007 (4) JCC (NI) 388 has held as follows :-
"24. It would be relevant to note that the statue does not refer to the debt being payable, meaning thereby, a post dated cheque for a debt due but payment postponed at a future date would attract Section 138 of the Negotiable Instruments Act 1881. But the cheque issued not for an existing due, but issued by way of a security, would not attract Section 138 of the Negotiable Instruments Act 1881, for it has not been issued for a debt which has come into existence."
24. The CW 1 in his cross-examination has stated that the cheque in question was handed over to the complainant on the same date as mentioned on the cheque in question.
On the other hand, DW 4 has stated that the cheque in question was given to the complainant at the time of subscription of chit by him. There is no documentary evidence on record to prove the date of handing over the cheque in question to the complainant. Therefore, in view of clause (b) of Section 118 of the N.I Act, I shall presume that the cheque in question was drawn on cheque date i.e. 18.05.2012 and the same was not given by the accused at the time of raising the chit fund in July, 2007.
25. The Ld. Counsel for the accused has further argued that the cousin brother of accused namely Rajeev Kapoor has also subscribed a chit and it is agreed between the accused and complainant that the chit amount of Rajeev CC No. 2977/12 Page 8 of 10 Kapoor will be adjusted towards the liability of the accused in full and final and therefore, in the statement of account Ex. CW1/6 an amount of Rs. 66,979/- was credited by the complainant in full and final settlement. DW 3 and DW 4 have admitted in their cross-examination that no written agreement was executed to prove the fact that the complainant has settled the chit in the name of the accused at an amount of Rs. 66,979/-. Moreover, as per statement of account Ex. CW1/6, the accused was liable to pay certain amount even after the credit of Rs. 66,979/-. Therefore, in view of the above discussion, it is held that the accused had issued the cheque in question to discharge his liability.
26. It is further alleged by Ld. Counsel for accused that accused had not received the Legal Notice Ex. CW1/4. To prove the delivery of Legal Notice Ex. CW1/4, the complainant has filed on Postal Receipts/AD Card Ex. CW1/5 (Colly.).
Moreover, the Hon'ble Supreme Court of India in case titled as C.C. Alavi Haji v. Palapetty Muhammed Jain. J (2007) 6 SCC has held that :-
"It is, thus, trite to say that where the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the principle incorporated in Section 27 of the GC Act would be attracted; the requirement of Clause (b) of proviso to Section 138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in Clause
(c) of the said proviso for payment by the drawer of the cheque.
Nevertheless, it would be without prejudice to the right of the drawer to show that the had no knowledge that the notice was brought to his address."
It is further observed that "It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of criminal law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that the did not receive the notice sent by post, can, within 15 days of the receipt of summons from the court in respect of the complaint under Section 138 of the 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 CC No. 2977/12 Page 9 of 10 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 the receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously content 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 GC Act and Section 114 of the Evidence Act."
The summons were served upon the accused at the same address as mentioned in the legal demand notice Ex. CW1/4. Moreover, accused has furnished the same address in his Bail Bonds. In view of the aforesaid judgment & Section-27, General Clauses Act, it can be safely presumed that the legal demand notice Ex. CW1/4 was served upon the accused.
Conclusion :-
27. In the facts and circumstances of the present case, on appreciation of the evidence and on the basis of material on record, I hold that the present complaint case is not maintainable as complainant has failed to prove the authority of Sh. Rajeev Sharma to file and prosecute the present complaint.
28. Therefore, no offence U/s 138 of N.I Act is made out against the accused. Hence, accused stands acquitted.
ANNOUNCED IN THE OPEN COURT ON 09.09.2013 All the pages from 1 to 10 are signed by me. (GAGANDEEP JINDAL) METROPOLITAN MAGISTRATE (NI ACT) - 12, DWARKA COURTS,NEW DELHI.
CC No. 2977/12 Page 10 of 10