Delhi District Court
M/S Hdfc Bank vs Nadeem Abbas Cc No. 1593/12 on 19 March, 2013
1
IN THE COURT OF SHRI JAGMOHAN SINGH, MM (NI ACT)08
DWARKA COURTS:NEW DELHI
CC NO:1593/12
Unique Case ID No: R0001012011
M/s HDFC Bank Ltd.
2ND FLOOR, EXPRESS BUILDING,
BAHADUR SHAH ZAFAR MARG,
ITO, NEW DELHI ...............Complainant
Versus
NADEEM ABBAS
1565/66, 1ST FLOOR
SARAI KHALIL, SADAR BAZAR
NEW DELHI 110006
Also at
315 Press Street
SADAR BAZAR, NEW DELHI 110006 ................Accused
Offence Complained of or proved : Under section 138 of Negotiable Instruments
Act, 1881
Plea of the Accused : Pleaded not guilty
Date of filing : 31.08.2009
Date of Institution : 07.09.2009
Date of reserving judgment/order : 20.02.2012
Final Order/Judgment : Convicted
Date of pronouncement : 19.03.2013
M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12
2
JUDGMENT
BRIEF FACTS AND REASONS FOR THE DECISION OF THE CASE:
1. Vide this judgment, I shall dispose of the present complaint u/s 138 of the Negotiable Instruments Act (in short, NI Act) filed by the complainant against the accused.
2. The case of the complainant is that the complainant is a Banking Company incorporated and registered under the Companies Act, 1956. The erstwhile Centurian Bank of Punjab finaced a loan to the accused under loan agreement no. 91506307. The said Bank was subsequently merged in the complainant. In partial discharge of his debts/liability towards the complainant, accused issued a cheque bearing no. 162101 dated 01.05.2009 for a sum of Rs. 39,485/ drawn on Punjab National Bank, Bara Hindu Rao, Delhi in favour of the complainant. According to the complainant, the aforesaid cheque when presented for realisation, was received back dishonoured vide bank return memo dated 17.06.2009 with the remarks "account closed". Consequentially, a legal notice dated 11.07.2009 was served by the complainant through its counsel upon the accused vide registered post AD dated 17.07.2009, calling upon the accused to make the payment towards cheque amount in question within 15 days of receipt of notice. According to the complainant, the said notice was duly served upon the accused but no payment against the above dishonoured cheque has been made by the accused within the requisite period. Hence the present complaint.
3. The cognizance of offence under Section 138 of the Negotiable Instruments M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 3 Act, 1881 was taken by the Ld. Predecessor Court and accused was summoned vide order dated 07.09.2009, upon which the accused appeared in Court and was admitted to bail. Thereafter, separate notice u/s 251 Cr.P.C. explaining accusations against the accused u/s 138 of the NI Act was framed against the accused on 30.09.2010, to which he did not plead guilty and claimed trial. Thereafter, an application u/s 145(2) of the NI Act moved on behalf of the accused seeking recall of the complainant's witness for cross examination was allowed and AR of the complainant was cross examined. Statement of accused u/s 313 Cr.P.C. was recorded on 03.05.2011. The accused cited one Amit Kumar as DW. However, summons issued to the said DW were received back unserved with the report that the said witness did not reside at the given address. The accused did not file fresh address of the said witness and vide separate statement of Ld. Counsel for accused DE was closed vide order dated 10.10.2011. Thereafter, final aurguments were heard from both the parties and the matter was listed for judgment. However, at that stage, an application was filed on behalf of the complainant seeking recall of CW1/AR of the complainant for bringing on record the extended power of attorney in favour of the AR. The same was allowed and Shri Gopal Ranga, CW1/AR was recalled who filed his extended PoA. In view of additional evidence coming on record, further final arguments were heard from both the parties.
4. Documents relied upon by the complainant are as follows:(i)Ex. CW1/1 :
Copy of Power of Attorney dated 16.07.2008 in favour of the AR. (ii) Ex.
CW1/2 : Original Cheque no. 162101 dated 01.05.2009 for Rs. 39,485/ drawn on Punjab National Bank, Bara Hindu Rao, Delhi Branch; (iii) Ex. CW1/3:
Original Cheque return memo dated 18.06.2009 (iv) Ex. CW1/4: Copy of M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 4 Legal Notice dated 11.07.2009; and (v) Ex. CW1/5(colly): Postal receipt along with two AD Cards.
5. It is well settled position that to constitute an offence under S. 138 N.I. Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that 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;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank;
(v) the payee or the holder in due course of the cheque 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 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
6. Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.
7. I have gone though the record and also heard both the parties. The following M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 5 questions arise for my consideration in the present case:
(i) Whether judicial notice can be taken of the merger of Centurian Bank of Punjab, in whose favour the cheque in question was issued, with the HDFC Bank, who is the complainant in the present case.
(ii) Whether the present complaint has been filed and prosecuted by a duly authorised representative of the Complainant.
(iii) Whether legal demand notice was served by the Complainant upon the accused.
(iv) Whether the cheque in question was issued for discharge of legally enforceable debt or liabilty towards the complainant.
(v) whether the defence of the acccused of other particulars, except his signatures, being filled by some one else is a valid defence in the eyes of law. Discussion on question (i) and finding thereon :
8. It was submitted by the Ld Cousel for the accused that the Complainant was not the Holder in Due Course of the cheque in question in as much as the merger of the payee Bank, i.e., Centurian Bank of Punjab, in whose favour the cheque in question was issued, with the HDFC Bank has not been proved by the Complainant.
9. Per cantra, it was submitted by the Ld. Counsel for the Complainant that on merger of Centurian Bank of Punjab with HDFC Bank, the entity remained the same and this fact has also been mentioned in the Complaint. He further M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 6 submitted that the amalgamation took place vide order of the Reserve Bank of India dated 20.05.2008 of which judicial notice can be taken by this Court. He also drew the attention of the Court to para 3 of the affidavit of evidence of the Complainant (Exh CW1/A) wherein it is stated that "the erstwhile Centurian Bank of Punjab ..... was subsequently merged in the Complainant above named." Ld. Counsel for the complainant also pointed out the cross examination of AR/CW1 dated 08.04.2011 where in the witness stated that the merger of Centurian Bank of Punjab had been approved by the Reserve Bank of India and all debts and liabilities of Centurian Bank became the debts and liabilities of HDFC Bank in view of the aforesaid merger. The said witness, however, admitted that the complainant had not filed any document to prove the said merger.
10.The above rival contentions may now be examined. Section 56 of the Indian Evidence Act, 1872 (in short, the Evidence Act) provides that facts which are judicially noticeable need not be proved. Section 57 (1) of the said Act provides that the Court shall take judicial notice of all laws in force in the territory of India. It further provides that in all the cases where the Court is required to take judicial notice, the Court may resort for its aid to appropriate books or documents of reference. It also provides that if the Court is called upon by any person to take judicial notice of any such fact, it may refuse to do so, unless and until such person produces any such book or document as it may consider necessary to enable it to do so.
M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 7
11. What the Court has to do in a case where it is bound to take judicial notice of a fact has been explained by the Full Bench decision in Executive Officer v. V. P. Devassy, 1970 Ker LT 991 in the following terms :-
"It is clear from S. 57 of the Evidence Act that in all cases where the Court is bound to take judicial notice, the Court may resort for its aid to appropriate books or documents of reference. There is thus a duty cast on the Court to refer to the necessary documents for the purpose of taking judicial notice of something of which it is bound to take judicial notice. Therefore, if that were necessary, the Court should have looked into the gazette or other book or document of reference for the purpose of ascertaining whether or not the law here in question had been brought into force. It is only where a document of reference for the purpose of deciding such a question is not readily available that the question of the Court calling upon the party concerned to produce it would arise."
12.A notification No. DBOD.No.PSBD.16193/16.01.131/2007-08 dated 20th May, 2008 issued by the Reserve Bank of India regarding the amalgamation in question is available on the website of the Complainant at http://www.hdfcbank.com/htdocs/common/pdf/RBI_Amalgamation_CBoP.pdfa nd the same is reproduced as below:
"DBOD.No.PSBD.16193/16.01.131/2007-08 May 20, 2008 Order Scheme of Amalgamation under Section 44A of Banking Regulation Act, 1949-Centurian Bank of Punjab Ltd. With the HDFC Bank Ltd. In exercise of the powers contained in subsection (4) of Section 44 A of Banking Regulation Act, 1949, the Reserve Bank of India hereby sanctions the appended scheme of amalgamation of Centurian Bank of Punjab Ltd.(Transferor Bank) with the HDFC Bank Ltd (Transferee Bank).The scheme of amalgamation shall come into effect from May 23, 2008.
(Anand Sinha) Executive Director"
M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 8
13.S.Nagarajan v. Vasanthakumar 1988 CRI. L. J. 1217 was an appeal filed before the Hon'ble Kerala High Court against the order of acquittal passed by the court of Additional Judicial Magistrate of I Class, Trivandrum in a complaint filed by the Assistant Collector of Central Excise, Trivandrum, alleging that both the respondents committed offences punishable under S. 135(1) of the Customs Act 1962. In acquitting the respondents the learned Magistrate based his decision mainly on the nonproduction of the notifications or copies thereof issued by the Central Government in exercise of the powers conferred by S.11B and 123 (2) of the Customs Act. It was held that notifications issued under S.11-B and S.123(2) of the Customs Act are legislative in character. It is in exercise of delegated powers, notifications are issued. It follows that the notifications are laws within the meaning of S.57(1) of the Evidence Act and the court is bound to take judicial notice of those notifications.
14.That being so, the above notification issued by the Reserve Bank of India in exercise of its powers under subsection (4) of Section 44A of the Banking Regulation Act, 1949 regarding the above said amalgamation is also law within the meaning of Section 57(1) of the Evidence Act. With the advent and advance of information technology, the information available on the internet and in the public domain is also as good as an information available in a reference book. Thus, for the purpose of taking judicial notice of a fact, the Court can make use of such information.
15.In view of the above discussion, I come to the finding that judicial notice can be taken of the amalgamation of Centurian Bank of Punjab with the M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 9 Complainant Bank.
Discussion on question (ii) and finding thereon
16.It was submitted by the Ld Defence Counsel that the complaint suffered from the basic defect that it had not been instituteted through an authorised person.
He submitted that in his cross examination, Shri Gopal Ranga, AR did not deny the suggestion that his PoA had already expired. He further stated that he had been working in Delhi since the beginning of his career and that the PoA had been executed at Mumbai and did not bear his signature or acceptance. Ld. Defence Counsel also argued that the initial power of Attorney dated 16.07.2008 Exh. CW1/1 was also defective on the ground that no Board Resolution was filed with it empowering Shri Aditya Puri, Manager Director or Shri A Rajan, Country Head Operations or Shri Nisheeth Sahay, Vice Pesident of the Complainant Company to appoint attorney on behalf on its behalf. He also pointed out that the said document Exh. CW1/1 also did not bear the seal of the Compainant Company and was also not witnessed by anyone. He further argued that the same defects existed in the fresh PoA dated 30.06.2011 Exh.
CW1/O which extended the earlier PoA till 31.03.2013. Therefore, Ld. Defence Counsel contended that Shri Gopal Ranga had no authority to appear on behalf of the Complainant or to adduce evidence.
17.Ld. Defence Counsel relied upon Ravi Kumar & Anr. Vs. R Ramalingam 2005 (1) DCR 329 [Madras High Court] in which the complainant was filed M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 10 by an individual complainant through his Power of Attorney. The Hon'ble High Court observed that u/s 142 of NI Act, no court shall take cognizance of any offence punishable under Section 138 NI Act except upon a complaint made by payee or holder in due course of the cheque. It was held that as the PoA himself was neither the payee or holder in due course of the cheque, it was not correct on the part of the Magistrate to take cognizance of the complainant.
18.He also relied upon M/s Nibro Ltd. Vs. National Insurance Company Ltd AIR 1991 Delhi 25 in which it was held by the Hon'ble Delhi High Court that the question of authority to institute a suit on behalf of the Company was not a technical matter and had far reaching effect. Thus, it was further held that, unless a power to institute a suit is specifically conferred on a particular director, he had no aurhority to institute a suit on behalf of the company.
19.The above contentions may now be dealt. In Shankar Finance and Investments M/s. v. State of A. P. AIR 2009 S C 422 it was held as follows:
"Complaint of dishonour of cheque can be filed by Power of Attorney holder of payee in the name and on behalf of payee. Section 142(a) requires that no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint made in writing by the payee. Thus, the two requirements are that (a) the complaint should be made in writing in contradistinction from an oral complaint; and (b) the complainant should be the payee or the holder in due course, where the payee has endorsed the cheque in favour of someone else. Once the complaint is in the name of the 'payee' and is in writing, the requirements of section 142 are fulfilled. Who should represent the payee where the payee is a company, or how the payee M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 11 should be represented where payee is a sole proprietary concern, is not a matter that is governed by S. 142, but by the general law." (Para 7)
20.It was further held by the Hn'ble Supreme Court that the competence of Power of Attorney holder to initiate criminal proceedings on behalf of his Principal is well recognised. It is thus clear from the above decision that a Power of Attorney is competent to file a complaint u/s 138 NI Act on behalf of the Principal. The ratio of Shankar Finance (supra), which was a judgment rendered by the Hon'ble Supreme Court shall prevail over the decision in Ravi Kumar (supra) which was rendered by the Madras High Court,
21.Now I come to the question whether non-signing of the Power of Attorney by the authorised person makes it invalid in law, as is contended by the Ld. Defence Counsel. The authorisation by the Donor/Principal of the Donee/Agent through PoA is governed by the Powers of Attorney Act, 1882 [Act No. 7 of 1882] (in short, the PoA Act). Section 1 of the PoA defines a Power of Attorney to include any instruments empowering a specified person to act for and in the name of the person executing it. Section 2 of the Act provides for the execution under the PoA as follows:
" 2. The donee of a power-of-attorney may, if he thinks fit, execute or do any instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by the authority of the donor of the power; and every instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof. This section applies to powers-of-attorney created by instruments executed either before or after this Act comes into force."
22.The above two sections of the PoA Act are the only relevant sections for the M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 12 purpose of the question under consideration. It is clear from the bare reading of the above two sections that it is not the mandate of the law that a PoA to be effective must necessarliy be signed by the Donee also.
23.Further, Section 85 of Evidence Act raises a presumption about the execution of a power of attorney provided two conditions are satisfied. Firstly, it must be executed before a Notary Public and secondly it must be authenticated by him.
24.In the present case, the PoA(Ex EW1/1) has been executed by Nisheeth Sahay, Vice President of the Complainant at Mumbai and his signatures are followed by stamp in his name including his employee code. It has been duly attested by a Notary Public on 16th July, 2008. Through the said PoA, Shri Gopal Ranga has been nominated to be the Attorney of the Complainant till 31st March, 2010. Similarly, the extended PoA Exh. CW1/O has been signed by Shri Rajesh Kumar, Executive Vice President followed by his stamp which also includes his Employee Code. It is correct that no Board Resolution was filed with the PoA Exh CW1/1 empowering Shri Aditya Puri, Manager Director or Shri A Rajan, Country Head Operations or Shri Nisheeth Sahay, Vice Pesident of the Complainant Company to appoint attorney on behalf of the complainant company. Similarly, no Board Resolution was filed with the PoA Exh CW1/O empowering Shri Aditya Puri, Manager Director or Shri A Rajan, Country Head Operations or Shri Rajesh Kumar, Executive Vice Pesident of the Complainant Company to appoint attorney. However, it is recorded in both the above ducements that Shri Aditya Puri, Managing Director was appointed as Attorneyinfact in the name and on behalf of the Bank and delegated certain powers and authorities to him to be exercised by him subject to the general M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 13 superintendence, control and directions of the Board of Directors of the Bank by virtue of Power of Attorney issued on 10th January 1995 which was renewed by the Board from time to time till 31st March 2010. Similarly, it is recorded in the extended PoA Exh. CW1/O that PoA in favour of Shri Aditya Puri has been exteded till 31st March, 2013. It is also recorded that the said Shri Aditya Puri, by vritue of such powers was also authorised to substitute and appoint one or more Attorney or Attorneys to exercise by or on behalf of the Bank, all or any of the powers conferred upon him. In respcet of PoA Exh 1/1, Shri Aditya Puri appointed Shri A Rajan as his Attorney who appointed Shri Nisheeth Sahay who inturn appointed Shri Gopal Ranga, Assistant Manager of the Complainant Bank, as Attorney. Similarly, in extended PoA Exh 1/O, Shri Aditya Puri appointed Shri A Rajan as his attorney who appointed Shri Rajesh Kumar who inturn appointed Shri Gopal Ranga as Attorney.
25.From the above it is clear that Shri Aditya Puri was appointed Attorney by the Board of Directors itself who delegated their powers to him with authority to further appoint Attorneys. The chain of Attorneys thus started with Shri Aditya Puri and ended with the present AR, Shri Gopal Ranga. In the circumstances, non production of the Board Resolution appointing Shri Aditya Puri as the Attorneyinfact is of little consequence and would not affect the valadity of PoA Exh CW1/1 or Exh CW1/O in any manner as both the above documents have been tendered by the AR in Court on oath. Similarly, as both the above PoAs have been excuted before the Notary, the fact that they have not been witnessed by any other person would also not affect their veracity or M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 14 credibility. In any case, it is not the mandate of the PoA Act that in order to be effective, a PoA must be witnessed by any person.
26. As both the above PoAs are executed before a Notary Public and have also been authenticated by him and thus a presumption in favour of their valadity arises in terms of Section 85 Evidence Act.
27.The ratio of Nibro Limited (supra) relied upon by the Ld. Defence Consel is not applicable to the present case firstly as the said decision was rendered in respect of a civil suit while the case in hand is a criminal complaint. Secondly, it was observed even in the above case that it was well settled that under S.291 of the Companies Act except where express provision was made that the powers of a company in respect of a particular matter were to be exercised by the company in general meeting in all other cases the Board of Directors were entitled to exercise all its powers. The facts of the above case are also distinguishable from the present case as in Nibro Limited (supra) the plaintiff could not place on record any Board Resoution or decision authorising him to institute the suit on behalf of the company. However, in the present case, it is categorily recorded in both the above PoAs that powers were delegated to Shri Aditya Puri by the Board of Directors itself and he was appointed Attornyin fact of the complainant. Thus, the ratio of Nibro Limited (supra) is not applicable to the present case.
28.The last limb of the argument of the Ld. Defence Counsel was that as neither of the PoAs Exh. CW1/1 and CW1/O bore the seal of the complainant company, the same were not admissible in evidence. The same may now be examined.
M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 15 Sections 48 of the Companies Act, reads as under: "48. Execution of deeds.
(1) A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place either in or outside India.
(2) A deed signed by such an attorney on behalf of the company and under his seal where sealing is required shall bind the company and have the same effect as if it were under its common seal."
29.In Pancharan Dhara and Ors. v. Monmatha Nath Maity (D) by L.Rs. & Anr. AIR 2006 SC 2281= 2006 AIR SCW 3020 it was observed as follows: "38. So far as the question of putting up of the seal of the Company is concerned, it is a relic of the days when mediaeval barons, who could not read or write, used their rings to make a characteristic impress. Even in absence of a seal, the Company may still be held to be liable having regard to the nature of transaction and the authority of those who had executed it. If the act of the Directors is not ultra vires or no public policy is involved, the parties acting thereupon cannot be left at large. (See Probodh Chandra v. Roadoils (India) Ltd., AIR 1930 Cal 782 and OTV Birwel Co. Ltd. v. Technical and General Guarantee Co. Ltd. (2002) 4 All ER 668)."
30. Similarly, in Sociedade de Fomento Industrial Ltd., M/s. v. Ravindranath Subraya Kamat AIR 1999 BOMBAY 158 it was observed as follows:
"Section 48 will come into play when somebody wants to enforce the M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 16 obligations arising under the contract against Company and when Company denies or disputes the execution of agreement or contract under which the obligation arises in favour of the third person by the Company. That is not the case in the instant matter and here it is the Company itself, as rightly contended by the appellants, that is seeking to enforce the clause 4 of the letter of appointment. Being so, reference to Section 48, is totally out of question."
31. The legal position which emerges from the above judgments is that the requirement of affixing a seal of the Company under Section 48 Companies Act will come into play when somebody wants to enforce the obligations arising under the contract against Company and not when the Company seeks to enforce its rights, as the case in present. Further, in the former case also, even in absence of a seal, the Company may still be held liable if the act of the Directors were not ultra vires or when no public policy was involved. In view of the same, nonaffixation of the seal of the Complainant Company on the PoAs CW1/1 and CW1/O is of little consequence.
32.Ld Defence Counsel also pointed out that the Counsel appearing on behalf of the Complainant is not from the panel of Counsels approved by the Complainant and the same was admitted by the AR during his cross examination. He, therefore, contended that the Counsel of the Complainant did not have any authority to appear in or pead the present case. Be that as it may, appointment of a Counsel by a Donee/AR from outside the penal approved by the Donor may be an irregularity committed by the Donee as against the M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 17 Donor. However, the same has no bearing on the competence of the said lawyer to appear in Court provided he has been enrolled with a State Bar Council.
33.The Ld. Counsel referred to here is Shri Akshay Shrivastava. Perusal of his vakalatnama filed on behalf of the complainant reveals that he is enrolled with the Uttar Pradesh Bar Council. His said enrollment coupled with the vakaltana filed on behalf of the complainant is sufficient to make him competent to appear in this Court on behalf of the Complainant.
34.In view of the above discussion, I come to the finding that the present case has been filed and prosecuted by a duly authorised representative of the complainant.
Discussion on question (iii) and finding thereon
35. It was submitted by the Ld. Defence Counsel that the legal notice (Exh. CW1/4) put on record by the Complainant was unsigned and did not qualify as a valid notice. He also submitted that the Acknowledgement Cards (Exh. CW1/5) did not bear the signatues of the accused or his family members. He further argued that the genuineness of the said Acknowledgeent Cards themselves were doubtful as the complainant failed to examine the Postman or any other official from the Postal Department.
36.Ld. Defence Counsel relied upon V Raja Kumari Vs. R Subbarama Naidu & M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 18 Anr. 2004 (4) Crimes 277 (SC), a two Judge Bench decision, to contend that the onus was on the complainant to show the service of notice.
37. The above contentions may now be dealt with. Section-27 of the General Clauses Act, which raises a presumption of service by post, reads as under:
" 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, where the expression "serve" or either of the expressions "give"
or "send" or any other expression in used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing pre- paying 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 delivered in the ordinary course of post."
38.In C.C. Alavi Haji v. Palapetty Muhammed and Anr. (2007) 6 SCC 555 it has been held as under:-
"S. 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station," due service has to be presumed. It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 19 return of the notice unserved.'' (para 14) (emphasis supplied)
39.It was further held as follows:-
"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 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 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 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 G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation." (para 17)
40. Coming to the facts of the present case, legal notice (Exh. CW1/4) was sent by the Compalainant, through his Counsel, to the accused through Regd AD Post dated 17.07.2009 at two addreses of the accused both located in Sadar Bazar, New Delhi vide Regd AD receipt Exh. CW1/5. One AD Card (also Exh. CW1/5) meant for 315, Press Street, Sadar Bazar address of the accused was received having on initials dated 18.07.2009 in blue ink but the same are not decipherable. The other AD Card (also Exh. CW1/5) meant for 1565/66, Sarai Khalil, Sadar Bazar address of the accused was received having one signature in Urdu and in red ink dated 18th July (year not decipherable).
M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 20
41. It is correct that the legal notice Exh. CW1/4 does not bear the signature of the Ld. Counsel who sent the same on behalf of the complainant. However, it is written in the end of the said notice that "a copy of the said notice is kept in office for record and reference". Thus, it is clear that Exh. CW1/4 is a copy of the legal notice, the original of which was sent at the above two addresses of the accused. The mere fact that the above office copy has not been signed by the Counsel of the accused is of no consequence at all as the same was kept only for the purpose of record. Thus, the nonsigning the said Exh. CW1/4 does not affect its validity in any manner.
42. Now coming to the second limb of the argument whereby the accused has denied receipt of the legal notice either himself or by his family members. As observed earlier, the accused has not led any evidence at all in his Defence. He merely denied having received the legal notice during his examination u/s 313 Cr.P.C.
43. In V S Yadav vs Reena CrLA No. 1136/2010 decided on 21.09.2010 by the Hon'ble Delhi High Court, it has been held that statement of accused u/s 281 Cr.P.C or 313 Cr.P.c is not the evidence of the accused and it can not be read as part of evidence as it has to be looked into only as explanation of incrimination circumstances.
44. Accordingly, the above statement of the accused is not the evidence of the accused and can not be read as such. The cross examination of the M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 21 CW1/AR on this point was only in the form of a suggestion in response to which he stated that he could not say if the AD card produced before him bore the signatures of the accused or not. That is fair enough as the delivery of the legal notice was affected not by the said witness but by the Postman.
45. As observed above, the complainant sent the legal notice Exh. CW1/4 at two addresses of the accused at Delhi and filed the above two AD Cards in proof of delivery of the said notice at both the addreses. The accused has not led any evidence to show that the above two addresses were not his correct addreses. In the circumstances, presumption u/s Section 27 of the General Clauses Act arose in favour of the complainant and mere suggestion to the AR/CW1 that the above AD Cards did not bear the signatures of the accused was not sufficient to rebut the said presumption. In the circumstances, the onus did not shift upon the complainant to prove the service of the legal notice. And, therefore, it was for the accused to summon the Postman or some other official of the Postal Department to show that the signatures appearing on the two AD Cards Exh. CW1/5 did not belong to him or to his family members. The accused, however, chose not to do so.
46. In V Raja Kumari (supra) relied upon by the accused, the legal notice sent to the accused was received back with the endorsement that the house of the accused was found locked. Ld. Magistrate held that the legal notice M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 22 was not served upon the accused and dismissed the complaint. A revision petition was filed before the Andhra Pradesh High Court which allowed the same while holding that nonservice of the notice was not a ground for rejecting the complainant even before it was numbered. It was further held that the effect of nonservice of notice when the house of the accused was closed would be considered after trial. The accused filed a criminal appeal before the Hon'ble Supreme Court against the said decision. Hon'ble Supreme Court after referring to various authorities on the point observed as follows: " the principle incorporated in Section 27 General Clauses Act 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 be served upon 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 tenuos 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." (para 14) (emphasis supplied)
47. It was, however, also observed as follows:
"19. Burden is on the complainant to show that the accused has managed to get an incorrect postal endorsement made. What is the effect of it has to be considered during trial, as the statutory scheme unmistakably shows the burden is on the complainant to show the service of notice. Therefore, where material is brought to show that there was false endorsement about the nonavailability M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 23 of noticee, the inference that is to be drawn has to be judged on the background facts of each case.'' In the result, appeal filed by the accused was dismissed.
48. From combined reading of C C Alavi Haji (supra) and V Raja Kumari (supra) it emerges that presumption u/s 27 General Clauses Act arises where the sender had despatched the notice by post with the correct address written on it and then the onus shifted upon the accused to show that it was not really served and that he was not responsible for such non service. The observations made in para 19 of V Raja Kumari (supra) were restricted to the facts of the said case as it was asserted by the complainant that the endorsement regarding locking of the house of the accused was incorrect. The said facts are distinguishable as in the present case, the two AD Cards (both Exh. CW1/5) were received back by the complainant, one having initials in English and the other having a signatue in Urdu. That being so, ratio of V Raja Kumari (supra) is not applicable to the present case.
49. In any case, in C C Alavi Haji (supra), which is a decision rendered by a ThreeJudge Bench (as against V Raja Kumari which was rendered by a Two Judge Bench), the Hon'ble Supreme Court has also observed in para 14 quoted above that when a notice is sent by registered post and is returned with a postal endorsement 'refused' or 'not available in the house' or 'house locked' or 'shop closed' or 'addressee not in station', due service has to be presumed and it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 24 return of the notice unserved.
50. From the above discussion, it emerges that the onus in the present case was upon the accused to rebut the presumption of service arising u/s 27 General Clauses Act and he has failed to rebut the same. Accordingly, I come to the finding that the legal notice in question is deemed to have been served upon the accused.
Discussion on question (iv) and finding thereon
51. It was submitted by the Ld Defence Counsel that the accused did not have any liability towards the Complainant. He further submitted that the complainant failed to file any loan document or even to mention date of such loan, details of loan amount, account statement, detials of EMIs or when and where the cheque in question was received by the Complainant. He also submitted that the cheque in question was presented twice and there is un explained gap of five months between the first and the second presentation of the cheque in question. He contended that in view of the above, the accused had sucessfully rebutted the existence of debt or liability. He also, very interestingly, argued that despite the said successful rebuttal by the accused, no opportunity was sought by the complainant to cross examine the accused.
52. The Ld Defence Counsel relied upon the following decisions in support of the above contentions, (i) Ashok Kumar Vs K Gunasekaran 2005 (I) DCR 323; in which it was held that if consideration for passing of the cheque is not satisfactorily proved, the presumption that the holder is a holder in due course M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 25 cannot be drawn in favour of the complainant; (ii) N Chirag Travels Pvt Ltd Vs Ashwani Kumar & Anr 2008(152) DLT 637 in which it was held that it is necessary to prove existence of debt or liability of accused by the complainant and if presumption under section 139 is rebutted by evidence of complainant himself, acquittal of accused is justified and needs no interference; (iii) Veena Ahuja Vs Central Excise 2011 (270) ELT 69 in whcih the Court held that one of the essential ingredients to attract penal consequences under section 138 of the Act is that the cheque had been issued in discharge, in whole or in part, of any legally enforceable debt or liability and that presumption under Section 139 can be rebutted by not only leading positive evidence but also by materials on record; (iv) S Timappa Vs L S Prakash 2010 Cri. L. J. 3386 [Kar] in which it was observed that except the cheque there was no other document evidencing advancement of loan. It was held that it was difficult to believe that a businessman (the complainant) would advance a substantial amount of Rs. 1,30,000/ without taking any document to evidence such transaction.
53. On the contrary it was submitted by the Ld. Counsel for the Complainant that the cheque in question was issued by the accused for a valid consideration and towards legally enforceable liability. He also pointed out the cross examination of the AR/CW1 dated 08.04.2011 in which he stated that the loan amount was approximately Rs. 2,60,000/ and that the amount of the cheque in question was the amount due from the accused due to default of EMIs on the date of presentation.
M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 26
54. The above rival contentions may now be dealt with. The accused admitted during his examination u/s 313 Cr. P. C. that the had taken a personal loan bearing account No. 91506307 from the erstwhile Centurian Bank of Punjab. He further admitted that the cheque (Exh CW1/2) in question was issued by him and bore his signatures and same was handed over to some representative of the Centurian Bank of Punjab. He, however, denied that the cheque in question had been issued by him in terms of alleged loan agreement.
55. It may thus be seen that the accused has admitted taking of personal loan from the erstwhile Centurian Bank of Punjab. I have already arrived at a finding that this Court can take judicial notice of merger of Centurian Bank of Punjab with the complainant Bank. The accused has also admitted his signatures on the cheque. He, however, stated during his examination u/s 313 Cr.P.C. that the cheque in question was not issued towards the liablity arising out of the above personal loan. It may now examined whether this defence of the accused has any force in the eyes of law.
56. Section 118 of the NI Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the NI Act stipulates that unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque , for the discharge of, whole or part of any debt or liability . The said presumptions are rebuttable in nature.
57. In Rangappa v. Mohan AIR 2010 SC 1898 it was held by the Hon'ble Supreme Court that the presumption mandated by S. 139 of the Act also included the presumption of the existence of legally enforceable debt or M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 27 liability and to that extent, the impugned observations in Krishna Janardhan Bhat (2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166 were held to be incorrect. (para 14)
58. In M/s. Kumar Exports v. M/s. Sharma Carpets, 2009 A.I.R. (SC) 1518, The Hon'ble Supreme Court observed in para 11 as under:-
"The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their nonexistence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability , the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 28 upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. The accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue".
59. The legal position which emerges from the above judgments is that presumptions u/s 139 of the Act also included the presumption of existence of legally enforceable debt or liability and that both the presumptions u/s 118 and 139 NI Act are rebuttable in nature. The accused may rebut these presumptions by leading direct evidence and in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case.
60. In the present case, the accused did not lead any evidence to rebut the above presumptions arising in favour of the complainant u/s 118 and 139 NI Act. I have already observed that the statement made by the accused during his examination u/s 313 Cr.P.C. is not his evidence and can not be read as same. The accused did not lead any evidence regarding the curcumstances in which or the purpose for which the cheque in question was given by him to the erstwhile Centurian Bank of Punjab. In these circumstances, I come to the finding that the accused has miserably failed to rebut presumptions of consideration and debt and liability arising in favour of the Compalainant in terms of Section 118 and 139 NI Act. Therefore, the onus did not shift to the complainant to prove either the consideration or existence of debt or M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 29 liability as a matter of fact.
61. In the wake of failure of the accused to rebut the above presumptions coupled with his admission of having obtained the loan from the erstwhile Centurian Bank of Punjab, nonfiling of loan document by the complainant, nonmentioning of the date of such loan and details of loan amount as well as nonproduction of account statement shall not vitiate the case of the complainant.
62. As regards the argument that the cheque in question was presented twice for encashment and there was gap or around five months between the two dates, suffice to say that it is settled law that a cheque can be presented any number of times during the period of its valadity.
63. I may briefly deal with the last limb of the present argument of the Ld. Defence Counsel that despite successful rebuttal (as argued by the Ld. Counsel) of various presumptions by the accused, no opportunity was sought by the complainant to cross examine the accused. Suffice to say that the accused never examined himself as DW. Hence, the question of his cross examination by the complainant does not arise at all.
64. Now coming to the authorities relied upon by the accused on this point. In Ashok Kumar (supra) the cheque in question was issued in the name of one Dilip Shivani against the loan obtained by the accused but the same was endorsed by the said Dilip Shivani in favour of the complainant. The trial Court found that in the absence of proof of passing of the consideration and when Dilip Shivani was also not examined as witness, the complainant was found not entitled to file the complaint. The Hon'ble Madras High Court also affirmed the said finding that the consideration for passing of the cheque was not satisfactorily proved. The facts of the said case are distinguishable from the present case in as much as the question of endorsement of M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 30 the cheque is question does not arise in the present case. Further, the accused has not only admitted having availed loan in question from the erstwhile Centurian Bank of Punjab, he has also failed to rebut the preumptions arising u/s 118 and 139 NI Act. Thus, the ratio of Ashok Kumar (supra) is not applicable to the present case.
65. In N Chirag Travels (supra), the transaction related to purchase of air tickets by the accused from the complainant. Hon'ble Delhi High Court came to the finding that the genuineness of the invoices raised against the sale of the air tickets was doubtful as the particulars regarding address were filled in them later on in different ink. Further, the complainant failed to prove any relation of Ms. Rica Goldsmith, in whose name two disputed air tickets were issued, with the accused. In the said facts, it was held that presumption u/s 139 stood rebutted from the evidence of the complainant itself. Again the facts in the present case are different as noted in the preceding para. Therefore, the ratio of N Chirag Travels (supra) is also not applicable to the present case.
66. Again in Veena Ahuja (supra) the complaint was filed u/s 138 NI Act by Central Excise authorties against the accused upon dishonour of cheque allegedly issued for realisation of excise duty. However, it was found that the excise duty payble by the accused was yet to be assessed by the authorites on the date of the cheque in question. While observing that the presumpltion u/s 139 NI Act could be rebutted by the accused with the help of the evidence of the complainant itself, it was held that the said presumption stood rebutted. However, as the accused has failed to rebut the said presumption in the present case, the abve ratio also can not have any application in the present case.
67. In S Timappa (supra) it was held by the Hon'ble Karnataka High Court that existence of debt was not the subject matter of presumption u/s 139 and that drawee of cheque had to prove existence of debt or liability. However, the said ratio is no more the law in view of the decision of the Hon'ble Supreme Court in Rangappa v.
M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 31 Mohan AIR 2010 SC 1898, discussed above, which held that presumption mandated by S. 139 of the Act also included the presumption of the existence of legally enforceable debt or liability.
68. Accordingly I find that the cheque in question is deemed to have been issued for discharge of legally enforceable debt or liabilty towards the complainant.
Discussion on question (v) and finding thereon
69. The last defence taken by the accused is that the particulars except the signatures in the aforesaid cheque had not been filled by him. It may now be examined whether the above defence is of any help to the accused.
70. Section 20 NI Act provides for "inchoate stamped instruments" and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an incomplete negotiable instrument"
such person 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."
71. The position in law has been explained in the judgment of the Division Bench of the Kerala High Court in Lillykutty v. Lawrance 2003 (2) DCR 610 in the following words:
"In the instant case, signature is admitted. According to the drawer of the cheque, amount and the name has been written not by the drawer but by somebody else or by the payee and tried to get it encashed. We are of the view, by putting the amount and the name there is no material alteration on the cheque under Section 87 of the Negotiable Instruments Act. In fact there is no alteration but only adding the amount and the date. There is no rule in banking business that payee's name as well as the amount should be written by drawer himself. "
M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12 32
72. The above judgment was quoted with approval by the Hon'ble Delhi High Court in Ravi Chopra vs State & Anr. 2008(2) JCC (NI) 169 and it was held that if the signatures on the cheque are admitted by the accused, it matters little if the name of the payee, date and amount are filled up at a subsequent point in time.
73. In view of the judgments discussed above, the contention of the Ld. Defence Counsel that other columns in cheque, except the signatures, were not filled in by the accused does not have any force in the eyes of law.
Order
74. In view of my above findings, I hold that the complainant has been able to prove its case against the accused beyond reasonable doubt. Accordingly, accused Nadeem Abbas is convicted of the offence under section 138 of the Negotiable Instruments Act. Order on sentence shall be passed after hearing the accused.
Announced in open Court on (JAGMOHAN SINGH) 19th March, 2013 (32 pages) M.M.(NI Act)-08/Dwarka, 19.03.2013/Delhi M/S HDFC Bank VS NADEEM ABBAS CC No. 1593/12