Delhi District Court
Npr Finance Ltd. vs . Vinod Kumar on 7 March, 2012
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CC No. 670/10
IN THE COURT OF MS. GURMOHINA KAUR :
METROPOLITAN MAGISTRATE:SPECIAL COURT13,
DWARKA COURTS : NEW DELHI.
C.C NO.670/10
NPR Finance Ltd. Vs. Vinod Kumar
1. Complaint Case No. : 670/10
2. Name of the complainant : NPR Finance Ltd.,
Regd. Office: 19, R.N.
Mukherjee Road, Main
Building, Ist Floor,
Kolkata700001
Delhi Office: 8C/6, 2nd
Floor, W.E.A. Abdul Aziz
Road, Karol Bagh, New
Delhi110005
3. Name of the accused and his : Mr. Vinod Kumar
parentage and residence S/o Sh. Mamu Ram, Villate
& PO Badshapur Mohalla,
Gandhi Nagar, Behind
Rainbow Restaurant,
Gurgaon, Haryana
4. Offence complained of or proved: U/s 138 of the
Negotiable Instrument Act,
1881
5. Plea of the accused : Pleaded not guilty
6. Final Order : Accused is acquitted
7. Date of Order : 07.02.2012
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CC No. 670/10
BRIEF FACTS OF THE CASE
1. The brief facts of the case are that the Complainant is a company duly incorporated under the Companies Act, 1956 having its office at Delhi and is engaged in the business of financing amongst other business. Mr. Prakash Chand is the attorney of the complainant company who has been duly authorized vide duly notarized Power of Attorney dated 15.07.2002 in his favour and the same is Ex.CW1/B.
2. It is stated in the complaint that the accused - Mr. Vinod Kumar in part discharge of his legally payable debt/liability towards the payment of the outstanding installments as on 07.08.2007 under the Vehicle LoancumHypothecation Agreement dated 10.09.2005 with respect to the vehicle bearing Regn. No. HR55C9930 which was executed between the complainant and the accused, the accused issued one cheque bearing no. 033798 dated 24.07.2007 for an amount of Rs.65,198/ and drawn on State Bank of Patiala, Mini Sectt., Gurgaon i.e. Ex.CW/1/C and when the said cheque was presented for encashment was returned back with remark 'insufficient funds' vide cheque return memo dated 27.07.2007 i.e. Ex.CW1/D. A legal demand notice which is Ex. CW1/E dated 12.08.2007 was sent by the complainant company through its lawyer which was duly served on the accused vide registered AD post receipt dated 14.08.2007 which is Ex.CW1/F 3 CC No. 670/10 and that the accused failed to make the payment within the statutory period of 15 days and hence this criminal complaint was filed by the complainant.
3. Upon service of summons, the accused put his appearance firstly before the court on 23.10.2008 and was thereafter admitted on bail vide order dated 24.08.2009. Notice was framed against the accused on 11.02.2010 to which he pleaded not guilty and claimed trial.
EVIDENCE
4. To support its case, the complainant company examined CW1 Mr. Prakash Chand, Authorized Representative of the Complainant company on 23.04.2011, 22.07.2011, 24.09.2011 & 05.11.2011.
5. On 23.04.2011, CW1 tendered his evidence by way of affidavit and reiterated the contents of the complaint and relied upon the documents filed at the stage of presummoning evidence. During crossexamination of CW1 by the Ld. Counsel for the accused, CW1 stated that the original agreement was Ex.CW1/X and admitted that originally the vehicle was hypothecated in the name of the complainant company. It was further stated that the EMI amount was Rs.4657/. CW1 also stated that the payment in the present complaint was mostly received by cash. It was further added that he would have to verify the same from the statement of account. It was further stated that the present HPA was of 23 installments and the accused was duly informed about the same 4 CC No. 670/10 vide letter dated 12.09.2005. It was further stated that he did not know whether any blank cheque was taken from the accused for security purpose. It was further stated that with respect to the accused a total of 9 installments have been received till date and that the complainant had already sent a demand notice in the month of June 2006 and the same is CW1/Z (Colly) along with AD Card and postal receipts. It was further stated that he did not know the condition of the vehicle and whether the same was defective or not. It was further admitted that the consumer court has asked the dealer of the vehicle to exchange the vehicle. It was further stated that Ex.CW1/E was sent to the hirer as well as guarantor. It was further stated that the details in the cheque in question have not been filled up in his presence. It was also stated that he did not know whether the details except the signatures on the cheque in question have been filled up by the officials of the complainant company. It was further stated that he could not say whether the cheque in question was a security cheque handed over by the accused at the time of financing the loan.
6. On 22.07.2011, during crossexamination of CW1, he stated that the blank PDCs were taken from the accused as per the terms of loan agreement and admitted that as per the loan agreement PDCs were taken from the customers. CW1 however stated that he could not say as to how many cheques were received by the complainant company from the accused. It was further stated that the company had also taken promissory notice duly signed by the accused and a 5 CC No. 670/10 demand notice was sent tot he accused in case of default as per the loan agreement. It was further admitted that in case of default of payment as per agreement the company is empowered to take possession of the vehicle. It was further stated that the complainant company was not aware that the vehicle was defected. It was further stated that details of the notice sent to the accused in the year 2006 were within the personal knowledge of account department.
7. On 24.09.2011, during crossexamination of CW1, he admitted that 23 PDCs were taken from the accused at the time of sanctioning the loan and the cheque in question collectively contains the amount of 14 EMIs, however, it does not contain any overdue interest. It was denied by the CW1 that the cheque in question has been misused.
8. On 05.11.2011 , during crossexamination of CW1, he stated that he placed on record the statement of account which is Mark Z1 and as per the legal notice dated 12.06.2006 Rs.85,885/ was outstanding against the accused upto 31.05.2006. It was however stated that the statement of account did not reflect any cheque which may have been taken in advance from the accused. It was further stated that the amount arrived at as per the statement of account as on 03.05.2006 is total outstanding amount availed by the accused which was recalled due to default on his part and the same finds collaboration in the agreement between the parties whereby future installments can be demanded together. CW1 6 CC No. 670/10 denied the suggestion that the cheque in question has been misused by the complainant which was a part of the PDCs taken by the complainant in advance. CW1 further denied the suggestion that no legal demand notice was ever served upon the accused and that there was no liability of the accused towards the complainant company
9. Complainant Evidence was thereafter closed on 15.11.2011 and the matter was fixed for 29.11.2011 for recording of statement of the accused.
10.The statement of the accused under Section 313 of Cr.P.C. was thereafter recorded on 29.11.2011 wherein he stated that the cheque in question was issued in blank as security to the complainant. It was further stated that he did not receive any legal demand notice and the vehicle financed was defective and despite repeated requests, the dealer did not exchange the aforesaid vehicle and the same is still in possession of the dealer and he did not make any future payments since the vehicle remained in possession of the dealer.
11.Thereafter, the matter was fixed for D.E. Accused moved an application on 29.07.2011 U/s 315 Cr. P.C. to examine himself and also wishes to examine another person as a witness.
12.On 18.02.2012 during examination in chief of DW1 - Vinod Kumar he stated that he had purchased an auto from Chaudhary Motors in the year 2005 and the installments of which was Rs. 4400/ approximately. It was further stated that there was technical 7 CC No. 670/10 fault in the auto after 23 months and the service station refused to replace the same. It was further stated that his father was regularly repaying the monthly installments and that he had approached his financer Ram Pal to settle the present complaint who along with another person refused to intervene as the matter was already subjudice and thereafter, his father stopped making payments as he was asked by the other person and since there was a dispute pending. During crossexamination of DW1, he stated that the loan was being repaid by his father though the vehicle was registered in his name. DW1 admitted that he had signed the vehicle loancum hypothecation agreement and also admitted his signatures on the cheque in question. It was further sated that the loan was repayable by way of PDCs and that the complainant company had taken blank cheuqes which were only signed by him. It was further stated that he could not tell that how many installments were paid by him to the complainant. DW1 admitted that the payment of installments and the fault in vehicle had no relation and he had to make the payments of installments even if the vehicle was not working.
13.Thereafter, another person by the name of Sh. Ompal was also examined in D.E. as DW2 on 18.02.2012 wherein during examination in chief it is stated by DW2 that the father of the accused was his brother and the accused and his father had asked the agency to replace the front of the vehicle which was defective and the same was refused. It was further stated that his brother had 8 CC No. 670/10 stopped making payment since the auto was not functioning properly. During the crossexamination of DW2 it is stated that he was a guarantor and the addresses mentioned in notice Ex.CW1/E and Ex.CW1/Z are his addresses which are correct. It was further stated that document Ex.DW2/C1 contains his signatures at point A. It was further stated that Mr. Rampal along with other person had asked his brother to stop making payment. Thereafter, D.E. was closed and the matter was fixed for final arguments.
14.Both the parties lead their final arguments on 22.02.2012 ARGUMENTS
15.During final arguments, AR of the complainant company submitted that the accused had financed a vehicle loan and all documents with respect to the same have been placed on record and the factum of vehicle being defective have no nexus with the complainant. It was further argued that the accused has admitted his signatures on the cheque in question. It was further argued that the accused had not made any payment and the address mentioned on the legal demand notice is correct.
16.On the other hand Ld. Counsel for the accused argued that the vehicle was originally hypothecated in the name of the complainant company and that a security cheque issued by the accused has been misused. It was further argued that the legal demand notice was not received by the accused since it was not 9 CC No. 670/10 sent at the correct address of the accused.
SECTION 138 NEGOTIABLE INSTRUMENTS ACT
17.This court has heard the arguments on both the sides and have carefully gone through the record. On the basis of the facts and arguments placed before the court, one main issue is to be decided as hereunder: i. Whether there was legally enforcible liability outstanding against the accused person as on the date of presentation of the cheque in question?
18.It is now pertinent to go through Section 138 of Negotiable Instruments Act.
138. Dishonour of cheque for insufficiency, etc., of funds in the accounts Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for"a term which may extend to two year", or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.10 CC No. 670/10
(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque,"within thirty days" of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and
(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability.
19.It is pertinent to mention section 139 and Section 118 of the Negotiable Instruments Act which are as follows:
"Section 139. Presumption in favour of holder It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability."
"Section 118. Presumption of Negotiable Instruments of consideration Unless the contrary is proved, the following presumptions shall be made
(a) of considerationthat every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;
(b) as to date that every negotiable instrument bearing a date was made or drawn on such 11 CC No. 670/10 date;
(c) as to time of acceptance that every accepted bill of exchange was accepted within a reasonable time after its date its date and before its maturity;
(d) as to time of transfer. that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsements that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stampsthat a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course that the holder of a negotiable instrument is a holder in due course; provided that, where the instrument has been contained from its lawful owner, or form any person in lawful custody thereof, by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
20.Section 139 of the Negotiable Instruments Act lays down that it shall be presumed, unless contrary is proved that the holder of the cheque received the cheque of the nature stated in section 138 for the discharge of a debt or liability.
ISSUE NO. 1 : "Whether there was legally enforcible liability outstanding against the accused person as on the date of presentation of the cheque in question?"
12CC No. 670/10
21.It is the case of the complainant that the accused had taken a loan from the complainant and had issued the cheque in question towards his partial debt/liability. It is an admitted fact that the accused availed the loan facility from the complainant. However, Ld. Defence Counsel has alleged that the cheques in question was given as security by the accused at the time of availing the loan and that the complainant has misused the cheque in question. It is also alleged that there is no outstanding liability since the vehicle was found defective and is lying in the possession of the dealer.
22.It is admitted fact that the accused had availed a loan. It is also seen that during the cross examination the CW1 has stated that a notice was sent ot the accused in June 2006 and the same was Ex.CW1/Z which is the legal notice along with its postal receipts and AD Card. CW1 had also stated that the cheque in question is the total of 14 installments which have been defaulted by the accused.
23.On the perusal of the aforesaid notice, it is seen that it is specifically stated in para 4 that the accused has breached the agreement and therefore the complainant has terminated the agreement calling upon the accused to pay the entire amount due and payable failing which legal proceedings may be initiated against the accused.
13CC No. 670/10
24.It is important to mention that the presumptions raised by virtue of Section 118 and 139 of the N.I. Act in favour of the complainant that the cheques in question were issued for a valid consideration is rebutable. In the opinion of the court, once an agreement between the parties is terminated, then the unused cheques which were issued by virtue of the agreement cannot be used later on as the terms of the agreement become unenforceable.
25.In the present complaint the cheques in question were issued initially towards the loan account and for legally enforceable liability, however, once the complainant terminated the loan agreement by virtue of notice Ex.CW1/Z dated 12.06.2006 and raised the consolidated demand, the liability of the accused at the time of presentation of the cheques in question does not remain the same. Also, it is to be seen that this notice has been placed on record by the complainant itself. Also, the complainant has not placed on record any document to show or to prove that the accused is still liable to pay the defaulted amount under the loan agreement even after the complainant has itself terminated the loan agreement. Therefore, by virtue of the aforesaid facts and discussions, the presumptions raised by virtue of Section 139 and 118 of N.I. Act have been rebutted by the accused and that this court is of the opinion that there was no legally liability against the accused persons as on the date of presentation of cheques in 14 CC No. 670/10 question. Accordingly, this issue is decided in favour of the accused and against the complainant.
FINAL ORDER
26. In view of the aforesaid facts and discussions, this court is of the opinion that the complainant has not been able to prove its case against the accused persons beyond reasonable doubts. Hence, the accused - Mr. Vinod Kumar is hereby acquitted for an offence U/s 138 N.I. Act.
27.Bail bond, if any, stands cancelled. Surety, if any, stands discharged. Endorsements, if any, be also cancelled.
28. File be consigned to Record Room.
Announced in the Open Court
on 7th March 2012 (GURMOHINA KAUR)
METROPOLITAN MAGISTRATE
DWARKA COURT:NEW DELHI