Delhi District Court
This Is A Complaint Filed Against The ... vs State Of on 28 July, 2008
1 C. C. No.2412/07
IN THE COURT OF SH. ASHISH AGGARWAL:
METROPOLITAN MAGISTRATE, DELHI
Sh. Ashok Kapoor ......Complainant
Versus
Kanshi Nath Dwarka Nath & Anr. ...... Accused
JUDGMENT
(a) Complainant Case No. : CC No. 2412/07 (new no.)
(b) Date of offence : After fifteen days of service of notice dated 22.10.01
(c) Complainant : Sh. Ashok Kapoor, S/o Sh. Madan Lal Kapoor, R/o 3, Broadwells Coventry, England.
Also at:
3338, Kucha Kashgari, Bazar Sita Ram, Delhi- 110006.
Through his General Attorney Sh. Suresh Kumar, S/o Sh. Khushi Ram, R/o H. No. 58, New Colony, Narela, Delhi-110040.
(d) Accused : 1. Kanshi Nath Dwarka Nath 2528, Tilak Bazar, Delhi-
110006.
2. Sh. Dwarka Nath, Prop. M/s Kanshi Nath Dwarka Nath, R/o 2528, Tilak Bazar, Delhi-110006.
2 C. C. No.2412/07
(e) Offence : Section 138 of Negotiable Instruments Act, 1881 (f) Plea of the accused : Not guilty (g) Final order : Accused is convicted of the offence under Section 138 of Negotiable Instruments Act, 1881 (h) Date of institution : 26.11.01 (i) Date of Judgment : 28.07.08
BRIEF STATEMENT OF REASONS FOR THE DECISION
1. This is a complaint filed against the accused namely M/s Kanshi Nath Dwarka Nath and Mr. Dwarka Nath under Section 138 of Negotiable Instruments Act, 1881. The allegations stated in the complaint are that M/s Sanjay International was the proprietorship firm of Sh. Vinod Kapoor. M/s Sanjay International had advanced loan to the accused. After the demise of Sh. Vinod Kapoor on 06.09.2000, the firm was bequeathed to the complainant under a Will executed by Sh. Vinod Kapoor. The accused was satisfied that the complainant had the right to realise the loan amount. The accused issued three cheques bearing no. 546934 for Rs. 1,00,000/-, 546932 for 3 C. C. No.2412/07 Rs.1,00,000/- and 546933 for Rs.1,50,000/- all dated 14.10.01 drawn on Canara Bank, East Patel Nagar, New Delhi in favour of the complainant for repayment of part of the loan advanced to the accused by M/s Sanjay International. The complainant presented the said cheques for encashment to the banker of the accused. The said cheques were received back dishonoured vide memo dated 19.10.01 with remarks "Account closed". Legal demand notice dated 22.10.01 was served upon the accused by registered AD and UPC. The accused failed to make payment of cheques amount despite service of notice and therefore, according to the complainant, the accused is liable for the offence under Section 138 of Negotiable Instruments Act, 1881.
2. Upon perusal of the complaint and affidavit in evidence of complainant, the accused was summoned for the offence under Section 138 of Negotiable Instruments Act, 1881 vide order dated 14.05.02. After appearance of the accused, notice under Section 251 of Code of Criminal Procedure, 1973 was served upon the accused vide order dated 02.11.04, to which he pleaded not guilty and claimed trial.
3. To prove its case, the complainant examined Sh. Suresh 4 C. C. No.2412/07 Kumar as CW-1, who reiterated the allegations made in the complaint in his affidavit Ex. C-1 which was tendered in evidence on 22.05.06. The following documents were relied upon and identified by the witness :-
a) Power of attorney as Ex CW1/1;
b)Original cheques dated 14.10.01 as Ex CW1/2 to Ex CW1/4;
c) Cheques returning memos as Ex CW1/5 to Ex CW1/7;
d)Legal demand notice dated 22.10.01 and postal record as Ex CW1/8 to Ex CW1/11;
e) Registered envelope received back as Ex CW1/12 and Ex CW1/13.
The witness was cross-examined and discharged. Complainant's evidence was closed by order dated 03.04.07.
4. Statement of accused under Section 313 of Code of Criminal Procedure, 1973 was dispensed with vide order dated 08.05.07.
5. The accused chose not to adduce evidence in his defence. Defence evidence was closed by order dated 28.02.08.
6. The record is perused. Arguments advanced by Ld. Counsels for the parties have been heard.
5 C. C. No.2412/07
7. In order to ascertain whether the accused has committed an offence under Section 138 of Negotiable Instruments Act, 1881, it is necessary to examine separately as to whether all the indispensable ingredients constituting the offence have been proved by the complainant. The offence under Section 138 of Negotiable Instruments Act, 1881 has the following ingredients:-
I. Existence of legally enforceable debt or liability and issuance of cheques in discharge of said debt or liability.
II. Dishonour of cheques in question.
III. Service of demand notice seeking payment of
amount of cheques within fifteen days from the date of service.
IV. Non-payment of cheque amount despite service of notice.
I. Existence of legally enforceable debt or liability and issuance of cheques in discharge of said debt or liability.
8. According to the complainant, the cheque had been given for repayment of loan advanced to the accused. To support the allegation, the complainant has examined his attorney Mr. Suresh Kumar as CW1 who has affirmed in his affidavit Ex C-1 that the cheque had been issued in discharge of liability which arose on account of loan advanced by M/s Sanjay International (proprietorship 6 C. C. No.2412/07 concern of Mr. Vinod Kapoor) to the accused. According to CW1, M/s Sanjay International was bequeathed to the complainant under a Will executed by Mr. Vinod Kapoor. The accused was satisfied regarding the right of the complainant to receive payment and therefore, the accused tendered the cheques.
9. On the other hand, counsel for the accused has contended that the cheque had not been handed over to the complainant as payment of any debt or liability. According to the accused, he intended to be admitted as member of a Co-operative Group Housing Society and Mr. Vinod Kapoor was instrumental in constituting such a society. The accused had handed over blank cheques to the complainant for that purpose. After the death of Mr. Vinod Kapoor, the cheques were usurped by his brother, the complainant herein. A dispute was also going on between the complainant and other family members of Mr. Vinod Kapoor. The accused has relied upon the cross-examination of CW1 to support its defence.
10. It is not disputed by the accused that he had issued the cheques in question. The defence, however, is that the cheques were given not for repayment of loan but for membership of a society and 7 C. C. No.2412/07 that the cheques were blank, when handed over.
11. Section 139 of Negotiable Instruments Act, 1881 provides a statutory presumption that the cheque was handed over in respect of a debt or other liability. Under Section 118 of Negotiable Instruments Act, 1881 every negotiable instrument is presumed to have been drawn and accepted for consideration.
In the case of K. N. Beena v. Muniyappan AIR 2001 SC 2895, it was observed as follows:
"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. This Court in the case of Hiten P. Dalal v. Bratindranath Banerjee reported in (2001) 6 SCC 16 has also taken an identical view.
7. In this case admittedly the 1st Respondent has led no evidence except some formal evidence. The High Court appears to have proceeded on the basis that the denials/ averments in his reply dated 21st May, 1993 were sufficient to shift the burden of proof onto the Appellant /Complainant to prove that the cheque was issued for a debt or liability. This is an entirely erroneous approach. The 1st respondent had to prove in the trial, by leading cogent evidence, that there was no debt or liability. The 1st Respondent not having led any evidence could not be said to have discharged the 8 C. C. No.2412/07 burden cast on him. The 1st respondent not having discharged the burden of proving that the cheque was not issued for a debt or liability, the conviction as awarded by the Magistrate was correct. The High Court erroneously set aside that conviction."
In the case of Hiten P. Dalal v. Bratindranath Banerjee, AIR 2001 SC 3897, it was observed as follows:
"Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras v. A. Vaidyanatha Iyer, AIR 1958 SC 61, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. "It introduced an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (ibid). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the Court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact.(1958 Cri. L.J. 232) xxx xxx xxx xxx 9 C. C. No.2412/07 The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted".
In the case of Girishbhai Natvarbhai Patel Vs. State of Gujarat and Anr. 2006 (1) DCR 594, it was held as follows:-
"It is an established position of law that under the scheme of Negotiable Instruments Act, especially under Scheme of 118 and 139 the statutory presumption is created in favour of the complainant and the court has to presume and proceed on the basis of this presumption unless it is dislodged by the accused on the strength of leading cogent and convincing evidence in support of his claim".
In the case of Saftarsab Vs. B. Allaiah @ Allapa 2006 (1) DCR 307 it has been observed as under :
"Section 118 based on special rule of evidence is applicable to negotiable instruments and the presumption is one of law and thereunder a Court shall presume inter alia that the negotiable instrument or the indorsement was made or indorsed for consideration. In effect, it throws the burden of proof of failure of consideration on the maker of the note or the indorser.10 C. C. No.2412/07
The burden is on the maker of the instrument to discharge the same. Further, as per Section 101 of the Evidence Act, whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exists. Therefore, the burden initially rests on the plaintiff who has to prove the promissory note was executed by the defendant. As soon as the execution of the promissory note is proved the rule of presumption laid down in Section 118 of the Negotiable Instruments Act helps him to shift the burden to the other side".
In the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan 1999 (4) RCR (Criminal) 309, it has been held by the Hon'ble Supreme Court as under:
"As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 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 discharge of any debt or liability."
12. Thus it is trite law that onus lies upon the accused to rebut the presumption and to establish that the cheque in question was not given in respect of any debt or liability. It therefore becomes critical to examine whether the explanation of the accused coupled with the evidence on record is sufficient to dislodge the presumptions 11 C. C. No.2412/07 envisaged by Sections 118 and 139 of Negotiable Instruments Act, 1881.
13. In the present case, admittedly, the cheques bear the signatures of the accused and had been voluntarily handed over by the accused. It is contended by the accused that the cheques were issued during the lifetime of Mr. Vinod Kapoor. Mr. Vinod Kapoor expired on 06.09.2000. The cheques are dated 14.10.01. Thus it cannot be stated that the cheques were issued while Mr. Vinod Kapoor was alive. There is absolutely no evidence on record to show that the cheques were issued before 06.09.2000. The accused has not replied to the notice issued to him by the complainant. Had the cheques been misused by the complainant, the accused must have asserted this by replying to the said notice. In the case of Kalu Ram v. Sita Ram 1980 RLR 44 (note), the Hon'ble High Court of Delhi drew an adverse inference on account of the failure of the defendant to refute charges by replying to the notice. It was observed that "silence showed that he had nothing to deny and hence it was a fit case for raising adverse presumption." The accused could have entered into the witness box to support his defence. This has not been done. The accused also failed to produce counterfoil of his cheque book, which could have 12 C. C. No.2412/07 indicated the date of issuance of the cheque. The accused has not produced statement of account of M/s Sanjay International maintained by him to show payments made by accused. Reference may be made to Section 114 (g) of the Evidence Act, 1872. In the case of Gopal Krishnaji v. Mohammed Haji Latif and Ors. AIR 1968 SC 1413, the Hon'ble Supreme Court has held that the Court must draw an adverse inference if the party who could produce a document to throw light on an issue in controversy fails to produce it. The contention of the accused that the cheques were blank, when issued, is also not supported by any evidence. The complainant witness has denied the suggestion that the cheques were issued in blank to Mr. Vinod Kapoor. Faced with this denial, the accused ought to have led evidence to the contrary which should have been more cogent or convincing and could furnish ground to reject the testimony of CW1. The mere making of suggestions is not sufficient to absolve the onus which lies upon the accused. Suggestions made during cross- examination, particularly when denied, cannot partake the character of evidence affirming the fact sought to be denied. It is highly improbable and is difficult to comprehend that the accused, inspite of being educated and aware of the implications, would issue blank cheques for membership of a Co-operative Group Housing Society. 13 C. C. No.2412/07 There is no reason for a Co-operative Group Housing Society to insist on deposit of blank cheques. Even if the cheques had been issued to the society, at least the name of the payee should have been filled in. It is the case of the accused himself that he had given the cheques to Mr. Vinod Kapoor. Hence, even going by the version of the accused, it would not be unreasonable to assume that the cheques were issued to discharge the dues owed to Mr. Vinod Kapoor and were intended to be encashed by Mr. Vinod Kapoor. The Will of Mr. Vinod Kapoor, which is duly registered and certified copy of which is on the judicial record, bequeaths the residuary movable assets to the complainant. Therefore, even if the contention of the accused that he had issued the cheques to Mr. Vinod Kapoor is accepted, this per se is not fatal to the case of the complainant. Nothing has been brought out in the cross- examination of CW1 which could totally demolish the case of the complainant or could render the complainant's witness unworthy of credit. There is no reason to reject the testimony of CW1.
14. The accused has contended that all the three cheques bear the same date and there was no reason for the accused to have issued three cheques. It is correct that payment could have also been made by a single cheque. However, the rationale behind this must be 14 C. C. No.2412/07 explained not by the complainant but by the accused himself who has admittedly issued the three cheques. The only explanation that has come on record is furnished by CW1 that the accused had represented to the complainant that he will have sufficient funds in his account on that day and therefore cheques may be presented after filling in the said date. The cross-examination of CW1 lends support to the contention of the accused that the cheques, when issued, were blank. This, however, is not sufficient to acquit the accused. A case alleging commission of offence under Section 138 of Negotiable Instruments Act, 1881 can rightly be founded on the dishonour of a cheque which was blank when issued and had been filled in by the complainant subsequently.
15. Under Section 20 of Negotiable Instruments Act, 1881, a person who issues a signed blank cheque is presumed to have given authority to the holder to fill in the details on the cheque and to present it for encashment. The very fact that a blank cheque was given as a mode of payment implies that the holder of the cheque had been given authority to fill in details on the cheque and present it for encashment. This is the natural and most inevitable purpose to be served by a cheque as an instrument of transfer of funds. In the case 15 C. C. No.2412/07 of Satish Jayantilal Shah v. Pankaj Mashruwala and Anr. 1996 Cri. L. J. 3099, it has been held that "no law provides that in case of any negotiable instruments entire body has to be written by maker or drawer only." In the case of Moideen v Johny 2006 (2) DCR 421, it has been held that when a blank cheque is issued, it gives an authority to the person to whom it is issued, to fill it up at the appropriate stage with necessary entries and to present it to the bank. Similar observations have been made in the case of Lillykutty v. Lawrance 2003 (2) DCR 610. It is not the case of the accused that though he had issued the cheques, it was understood or agreed that the holder would not encash them. The accused has failed to lead any evidence to the effect that he had issued the cheques not to the complainant but to Mr. Vinod Kapoor or that he had issued the cheques not for repayment of loan but for membership of a society. In absence of any evidence to this effect, the contention of the accused remains a mere possibility and does not meet the standard of preponderance of probability.
16. The accused has contended that M/s Sanjay International had no authority to advance loan and was not in such business and therefore it is improbable that loan had been advanced by it to the accused. The absence of license or authority does not disprove the 16 C. C. No.2412/07 factum of giving loan. The mere fact that M/s Sanjay International had no license or authority to advance commercial loans does not prohibit it from advancing a friendly loan. That apart, even if a commercial loan is advanced without license, that per se is no defence in a case under Section 138 of Negotiable Instruments Act, 1881, as held in the case of S. Parameshwarappa & Anr Vs. S. Choodappa 2007 CRI. L. J. 586, in which it was observed as follows:-
"Even in respect of the contention taken by the petitioners that it is a monetary transaction by way of money lending by the complainant and that he did not have the money lending license, the answer would be- this Court has already held in so far as a transaction of this nature, the question of the complainant having money lending license with him does not arise. May be true that this Court in respect of the money lending as a matter of obligation on the part of the plaintiff in a suit for recovery of money, would insist, as a condition precedent, to have a money lending license. This is not a suit for recovery of money rather, the complainant is exercising the special powers provided under the Negotiable Instruments Act for non-payment and dishonour of cheque which is more in a quasi civil and criminal in nature."
17. The accused has placed heavy reliance upon the cross- examination of CW1 to contend that complainant was not in India when the cheques were allegedly handed over to him. It is stated by CW1 that after execution of power of attorney, the complainant visited 17 C. C. No.2412/07 India in the year 2002. The cheques are dated 14.10.01. The power of attorney was executed on 22.09.2000. It is important to note that there is no evidence to show that the cheques were given in the year 2001. The mere fact that the cheques are dated 14.10.01 does not imply that the cheques were indeed physically handed over on that day. On the contrary, such a presumption is ruled out in view of the clear statement of CW1 in his cross-examination that "It was told by the accused to Sh. Ashok Kapoor that on this particular date, there will be sufficient funds in the account of the accused and you should present the cheques on these dates after filling the same". This itself indicates that the accused had issued the cheques before 14.10.01 and had authorised the complainant to fill in the date and present the cheques on 14.10.01. There is also no reason to assume that the cheques were not given to the the complainant while he remained in India in the year 2000 when the power of attorney was executed. Furthermore, there is no evidence to indicate as to when the complainant left India after execution of the power of attorney on 22.09.2000. It is possible that the complainant had remained in India after execution of GPA and also through the year 2001, when the cheques may have been issued.
18 C. C. No.2412/07
18. The accused has further contended that CW1 had no power to depose since he was only the attorney of the complainant. The accused has urged that adverse inference shall be drawn as the complainant has not himself appeared as witness. Reliance is placed by the accused on the case of Ram Prasad v. Hari Narain AIR 1998 Raj
185. The submission is devoid of force. There mere fact that CW1 is attorney of the complainant does not debar him from appearing as witness. Every person is entitled to appear as a witness on the strength of his personal knowledge. In the case of Central bank of India v. Tarseema Compress Wood Manufacturing Company and others AIR 1997 Bombay 225, it has been observed as follows:
"Anybody can come and give evidence in Court provided that he is acquainted with the facts of that case. No power of attorney or authorisation is necessary for any witness to give evidence in Court. It may be for filing the plaint, or signing the plaint or signing a written statement an authorition may be necessary, but to given evidence on oath, anybody, who is acquainted with the facts can give evidence."
In the case of M/s G. J. Packaging Private Ltd. & Anr. v. M/s S. S. Sales & Anr 2006 Cri. L. J. 214, it has been observed as follows:
"Where a power of attorney has full knowledge of the transaction, his statement can be recorded by the Magistrate for verification of the complaint, for ascertaining the truth of the allegations and to enable him 19 C. C. No.2412/07 to take a proper decision as to whether the process should be issued or not."
In the case of Ram Prasad v. Hari Narain AIR 1998 Raj 185 cited by the accused, it was observed as under:
"Power of attorney holder of a party can appear only as a witness in his personal capacity and whatever he has knowledge about the case, he can state on oath but he cannot appear as a witness on behalf of the party in the capacity of that party."
19. There is no dispute about the aforesaid proposition of law. The above observation has been upheld by the Hon'ble Supreme Court in the case of Janki Vashdeo Bhojwani & Anr. v. Indusind Bank Ltd. & Ors. (2005) SCCR 42. From the above decisions, it follows that there is no bar on the attorney deposing before the court provided he does so in his independent capacity and to state the facts which are in his own knowledge.
20. In the present case, CW1 has appeared on the basis of his personal knowledge, as stated by him in the verification clause of the affidavit Ex C-1. No evidence has been brought on record to show that the said clause of the affidavit is false or that complainant had no knowledge of the facts stated in his affidavit. It is not a mandatory 20 C. C. No.2412/07 requirement of the law that as a rule, the complainant must depose in each and every case. In the present case, the complainant resides out of India and has therefore been prosecuting this complaint through an attorney. It is the prerogative of the complainant as to who he wishes to examine as witness and he need not appear as a witness by himself, provided all relevant facts are proved by some other competent witness.
21. The accused has submitted that the complainant has failed to specify the amount of loan advanced to the accused in the complaint, which was later quantified to Rs.3,50,000/-. It is argued that the source of knowledge of extent of loan has also not been disclosed by the complainant. It is urged that if the loan was of Rs.3,50,000/- as disclosed in the cross-examination then there was no reason for the complainant to term payment of loan as "part payment", as stated in the complaint. The submission of accused is not tenable. The mere fact that the exact sum of loan has not been mentioned in the complaint is immaterial in as much as the onus is on the accused to show that the sum owed by the accused was less than the sum quantified by the complainant or that there was nothing which was due and payable by the accused. In the case of Joseph Jose 21 C. C. No.2412/07 v J. Baby Puthuval Puravidom Poothoppu and Anr. 2002 Cri. L. J. 4392, it has been held that there is no burden on the complainant to prove details of the transaction resulting in issuance of the cheque. The source of knowledge has been disclosed by CW1 in his cross- examination who has stated that he was employee of Mr. Vinod Kapoor and accordingly knew the facts. The mere use of term "part payment" is inconsequential and does not change the character of the loan.
22. The accused has contended that the complainant did not produce the diary of Mr. Vinod Kapoor in which he recorded the names of the person from whom loan is to be recovered. The onus to prove absence of consideration is upon the accused and adverse inference cannot be drawn on the non-production of the document by the complainant particularly when there is nothing on record to show that the dairy of Mr. Vinod Kapoor was in the custody or under the control of complainant.
23. The accused has contended that the complainant has not produced any document to show that M/s Sanjay International exists and that the loan was advanced by M/s Sanjay International to the 22 C. C. No.2412/07 accused. According to the case of the complainant, M/s Sanjay Interenational was a proprietorship concern of the Mr. Vinod Kapoor hence there is no requirement to show separate existence of M/s Sanjay International. The dues owed to M/s Sanjay International are treated as if they are owed to the complainant. The fact that loan was advanced by M/s Sanjay International to the accused has been established by the oral testimony of CW1.
24. Counsel for accused has relied upon the case of S. Parminder Singh v. Sandeep 147 (2008) DLT 113 in his defence. In the abovementioned case, the Hon'ble High Court of Delhi had acquitted the accused by holding that the complainant had failed to prove that the cheque amount was due and payable to him. The Hon'ble High Court noted that the jewellery which had been given as security for repayment had been sold by the complainant at a marginal price. Yet the complainant was insisting on payment of loan and had filled up the dishonoured cheque for this purpose. It was in those circumstances that the accused was acquitted. The facts of that case were different and the judgment is not applicable to the present case. In the present case, there is nothing on record that loan amount stood satisfied by the sale of security or otherwise. Nothing has been 23 C. C. No.2412/07 brought in the cross-examination of CW1 which could dissuade the court from believing the version of the complainant.
25. In the aforesaid circumstances, the accused has failed to dislodge the presumption in favour of existence of legally enforceable liability and issuance of cheque in discharge of the said liability.
II. Dishonour of cheques in question.
26. According to the complainant, the cheques Ex CW1/2 to Ex CW1/4 were dishonoured on presentation with the remarks "Account closed". This is supported by the affidavit Ex C-1, in which CW1 has stated that aforesaid cheques issued by the accused stood dishonoured. The cheques' returning memos have also been identified as Ex CW1/5 to Ex CW1/7. There is no evidence to the contrary adduced by the accused. Nothing stated in cross- examination could cast doubt on the dishonour of cheques. It is also not the case of the accused that the cheques were not dishonoured. Thus it is proved beyond doubt that the cheques issued by the accused stood dishonoured.
III. Service of demand notice seeking payment of amount of cheques fifteen days from the date of service.
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27. According to the complainant, he had issued demand notice dated 22.10.01 which was served upon the accused. This is reiterated by CW1 in his affidavit Ex C-1. The notice has been identified as Ex CW1/8. Postal receipts have been identified as Ex CW1/9 to Ex CW1/11. Demand notice dated 22.10.01 Ex CW1/8 seeks payment of cheques' amount within fifteen days from the date of service upon accused.
28. The accused has not adduced any evidence to establish that he was not served with the abovementioned notice. He has not even cross-examined CW1 regarding issuance or service of notice. In the case of Traders Syndicate v. Union of India AIR 1983 Cal. 337, it was held that when a witness is not cross-examined on a point, it may be assumed that the other party accepts the correctness of his version in that respect.
29. CW1 has stated in his affidavit that notice had been sent by registered AD as well as UPC. It is further affirmed that notice sent by registered AD was received back with endorsement "unclaimed", whereas the notice sent by UPC was not received back. The contents of affidavit are corroborated by the envelope of registered post 25 C. C. No.2412/07 bearing endorsements of postman and other postal receipts Ex CW1/9 to Ex CW1/12. It is not the case of the accused that his address mentioned in the notice is incorrect. The endorsements on the envelope indicate deemed service of notice. The fact that the notice sent by UPC was not received back by the complainant gives rise to a presumption of service of notice under Section 27 of General Clauses Act, 1897 and Section 114 of Evidence Act, 1872. In the case of M/s Prakash Jewellers Vs. M/s A. K. Jewellers 2002 (3) RCR (Criminal), it has been observed by Hon'ble High Court of Delhi as follows:
"Proceeding on this premise and going by this logic, we find no hitch in taking the view that payee or the holder of a cheque was as much entitled to claim the benefit of presumption of service once he had despatched the demand notice through registered post or postal certificate on the correct address of the sender written on it and where he had proved such despatch through original receipts. It becomes inconsequential whether sender had not received back the AD card or that he could not produce or prove it for having misplaced it or for some other reason."
In the case of V. Raja Kumari v P. Subbarama Naidu 2004 (4) RCR (Criminal), it has been observed by Hon'ble Supreme Court as follows:
"If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start 26 C. C. No.2412/07 running no matter that the payee sent the notice on the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Act. It must be borne in mind that the court should not adopt an interpretation which helps a dishonest evader, and clips an honest payee as that would defeat the very legislative measure.
xxxx xxxx xxxxx It is only the mode of making such demand which the legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is despatched his part is over and the next depends on what the sendee does."
In the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan 1999 (4) RCR (Criminal), it has been observed by Hon'ble Supreme Court as follows:
"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 non-service. 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 C. C. No.2412/07
30. The accused has not entered the witness box to deny receipt of legal notice and has also not led any other evidence to rebut the presumption or to establish that notice was not served upon him. Thus it is not in dispute that the notice was issued on behalf of the complainant and was served upon the accused.
IV. Non-payment of amount of cheques despite service of notice.
31. The complainant has argued that the accused failed to make payment of the amount of cheques despite service of the legal demand notice. This has been reiterated in the affidavit of CW1. The accused has not disputed this fact. There is no evidence to the contrary adduced by the accused. The accused has not even cross- examined CW1 on this aspect. Hence there is no reason to disbelieve the uncontroverted testimony of CW1 which has proved that the accused failed to make payment of amount of cheques within fifteen days from the date of service of demand notice.
32. Apart from the abovementioned contentions, the accused has questioned the maintainability of the complaint on the ground that the complaint has been filed through a power of attorney holder and yet the power of attorney was not filed alongwith the complaint. 28 C. C. No.2412/07 It is pointed out that the power of attorney did not find mention in the list of documents which accompanied the complaint. The document was only later filed and that too was a photocopy and not certified copy. It is also argued that certified copy of the power of attorney was produced by the complainant on his own without any directions from the court or being called by the accused. The accused has supported his submissions by relying upon the cases of Taruna Batra v Shikha Batra 147 (2008) DLT 257, R.B. F. Nidhi Limited & Anr Vs. State of A. P. & Ors. III (2003) CCR 236 and Y. Vijayalakshmi alias Rambha v. Manickam Narayanan 2005 Cri. L. J. 3572. It is further contended that the power of attorney purported to be executed by the complainant is fabricated. It is also pointed out that the document has been only marked and not exhibited. The accused has further assailed the document on the ground that though it is supposed to have been notarised, the name, number and details of the notary have not been mentioned. The interpolation in the document is also highlighted by the accused. It is submitted that the power of attorney was deliberately not produced with the complaint as it had to be manufactured later. It is further urged that even after execution of power of attorney, the complainant must sign the complaint by himself and it is the complainant only who shall be examined before 29 C. C. No.2412/07 issuance of summons. It is further submitted that the power of attorney does not delegate the power to sign the complaint.
33. The submissions made by Ld. Counsel for the accused are liable to be rejected. The complainant is entitled to file the complaint through power of attorney holder. The genesis of the right to delegate this power is owed to Section 2 of Powers of Attorney Act, 1882. The said provision lays down that the donee may execute any instrument by the authority of the donor and such instrument shall be as effectual as if it had been executed with the signature of the donor. In the case of M/s G. J. Packaging Private Ltd. & Anr. v. M/s S. S. Sales & Anr 2006 Cri. L. J. 214, it has been laid down as follows:
"The conspectus of judicial opinion, therefore, establishes a principle that complaint in respect of offence punishable under Section 138 of Negotiable Instruments Act, 1881 need not be personally filed by the payee or holder in due course. It can be filed by power of attorney of the payee."
In the said case, the Hon'ble Bombay High Court relied upon the decision of Apex Court in Ravulu Subbarao v. Commissioner of Income Tax, Madras AIR 1956 SC 604, wherein it has been held that every person who is sui juris has a right to appoint an agent for any purpose whatsoever. It is thus indisputable that the instant complaint 30 C. C. No.2412/07 is permitted by law to be filed and executed by power of attorney holder. It is also true that the power of attorney from which the agent derives his power to sign and institute the complaint must be also filed on the judicial record. In the present case, the power of attorney is on the judicial record and has been identified by the power of attorney holder as Mark A. The said power of attorney empowers Mr. Suresh Kumar to file and institute the criminal complaint. Signing the complaint is a part of the exercise of institution of complaint and therefore, it is also deemed to be authorised by the power of attorney Mark A. That the document has not been exhibited and is merely marked is inconsequential in view of the observations of Hon'ble Supreme Court in the case of R. V. E. Venkatachala Gounder v. Arulmigu Vishwesaraswami & V. P. Temple and Anr. (2003) 8 SCC 752. That the marked document is a mere photocopy is also immaterial since certified copy has also been produced by CW1 during the course of cross-examination. The attorney was never called upon to bring the original power of attorney and therefore adverse inference cannot be drawn on account of failure to produce the document. Nor can it be presumed that the document is fabricated. The interpolation in the power of attorney cannot be used against the complainant in absence of any evidence to show that the words were added without the 31 C. C. No.2412/07 authority or knowledge of the executor.
34. As per the list of documents enclosed with the complaint, copy of power of attorney was not filed alongwith the complainant. The power of attorney bears endorsement of my Ld. Predecessor dated 22.02.02. The endorsement read with the order dated 22.02.02 indicates that the copy of power of attorney was filed on that day and was under consideration when the accused was summoned vide order dated 14.05.02. In the case of Taruna Batra v. Shikha Batra 147 (2008) DLT 257, the Hon'ble High Court of Delhi considered the question as to whether complaint can be filed through power of attorney holder and if so, whether it was obligatory on the agent to produce the power of attorney and at what stage. The Hon'ble High Court relied upon the decision of Hon'ble Madras High Court in the case of M/s Ruby Leather Exports v. K. Venu Rep. Vandana Chemicals III 1994 (1) CRIMES 820 and held that complaint for the offence under Section 138 of Negotiable Instruments Act, 1881 can be filed through power of attorney holder. It was further held that the power of attorney should be produced before cognizance is taken by the Magistrate. Relying upon the abovementioned decision, the Hon'ble High Court of Delhi observed as follows:
32 C. C. No.2412/07
"However, the matter did not end there. The Madras High Court was dealing with a batch of cases where similar questions arose. In some cases filed through a power of attorney, the copy of power of attorney had been produced before the Magistrate at the time of taking cognizance. In some others the document was not so produced. This led to the further question whether the validity of the order taking cognizance would be different in either situation. In para 32 of the said judgment in M/s Ruby Leather Exports the Madras High Court was dealing with a case where the authorisation given by the complainant company to its representative was not produced before the Magistrate at the time of taking cognizance. The Court held that the cognizance would be barred under Section 142 (a), NI Act. In contrast in paras 34 and 36 where it was dealing with cases where the power of attorney was produced, the orders taking cognizance was upheld.
The resultant position is that the judgment of the Madras High Court of Ruby Leather Exports holds that even where it is permissible for an individual payee to file a complaint under Section 142 (a), NI Act through a power of attorney, the learned Magistrate cannot validly take cognizance of the offence complained of unless the document constituting the power of attorney is produced at that time of taking cognizance.
xxxx xxxx This Court is inclined to follow the dicta of the above two High Courts."
(Emphasis supplied) 33 C. C. No.2412/07
35. It was thus held by the Hon'ble High Court of Delhi that the production of power of attorney is necessary at the time of taking cognizance and if not so produced, the order of cognizance is liable to be set aside. It is not necessary that the power of attorney must be filed simultaneously with the complaint and the defect regarding authorisation is curable by filing the document before taking of cognizance and issuance of summons. The Hon'ble High Court, in that case, set aside the order of taking cognizance since the power of attorney was not filed at all. In the present case, copy of the power of attorney was on the record and was presumably perused at the time of taking cognizance. The ld. Predecessor of this Court was satisfied with the copy that was filed and accordingly issued summons. The order of cognizance is not under challenge at this stage. Be that as it may, the present complaint cannot be dismissed as not maintainable for non- production of the power of attorney and reliance upon the judgment in Taruna Batra v. Shikha Batra (ibid) is of no help to the accused.
36. The cases of R.B.F. Nidhi Ltd & Anr. Vs. State of A. P. & Ors. III (2003) CCR 236 and Vijayalakshmi alias Rambha v. Manickam Narayanan 2005 Cri. L. J. 3572 cited by the accused are not applicable to the facts of the present case. The judgments were delivered in 34 C. C. No.2412/07 petitions under Section 482 of Code of Criminal Procedure, 1973 wherein accused had sought quashing of proceedings under inherent powers. It was held that the complainant had not been examined under Section 200 of Code of Criminal Procedure, 1973 which is a necessary requirement of law. On this ground, the proceedings in the trial court were quashed. The order of cognizance has not been impugned by the accused in the present proceedings. This court cannot review the order of taking cognizance and this court does not have inherent powers similar to those provided under Section 482 of Code of Criminal Procedure, 1973. At the stage of final arguments, this court is required to return a finding as to guilt or innocence of the accused on the basis of evidence which has been led by the parties after accused was summoned and notice had been framed against the him. The proceedings that were conducted prior to issuance of summons and infirmities therein cannot be called into question at this stage. It is, however, relevant to note that in the abovementioned cases, the court has been permitted to issue orders of summoning the accused merely on the basis of statement of power of attorney holder recorded in evidence.
37. The accused has tried to take advantage of the fact that 35 C. C. No.2412/07 the power of attorney, though notarised, does not bear the name, number and details of the notary. However, defects in the manner of notarising of a document does not by itself prove that the document is fabricated. Questions relating to notary's execution have not been put to the witness. The document is also not required to be notarised by law. This ground raised by the accused per se is not sufficient to reject the power of attorney as having been fabricated.
38. In view of the aforesaid facts and circumstances, the complainant has succeeded in proving that the accused has issued the dishonoured cheques in discharge of his legally enforceable liability and that he failed to make payment of the amount of cheques within fifteen days from the date of service of demand notice. The demand notice had been issued within the period stipulated by law. The complaint has been filed within the period of limitation. All the ingredients required to make out a case under Section 138 of Negotiable Instruments Act, 1881 have been proved beyond reasonable doubt.
36 C. C. No.2412/07
39. The accused no. 1 is a proprietorship concern and is not a juristic entity. Accused no. 2, who is proprietor of accused no. 1 and signatory to the cheques, is accordingly convicted of the offence under Section 138 of Negotiable Instruments Act, 1881.
Announced in open court (ASHISH AGGARWAL) today on 28th day of July, 2008 MM, DELHI