Delhi District Court
The Matter Of Collage Culture & Ors. vs . Apparel Export Promotion Counsil ... on 26 July, 2012
IN THE COURT OF SH. HARVINDER SINGH,
SPECIAL METROPOLITAN MAGISTRATE - 05,
DWARKA COURTS, NEW DELHI.
Barclays Investments & Loans (India) Limited
through its Authorized Representative
Sh. Gaurav Gothwal ....................Complainant
Versus
Jaydeep Vig ....................Accused
C.C.NO.20778/10 dated 21.07.2010
PS - Subzi Mandi
under Section 138 of Negotiable Instrument
Act,1881
a) Sl. No. of the case : 20778/10
b) Alleged date of commission of : 12.06.2010 Approximately
offence
c) Name of the complainant : Barclays Investments & Loans (India)
Limited
d) Name of the accused, and his : Jaydeep Vig
S/o Late Sh. Darshan Lal,
R/o D - 253/1, Near Durga Mandir, Gali
No.01, Rama Vihar, New Delhi - 110 081.
e) Offence complained of : under Section 138 of N. I. Act, 1881.
f) Plea of accused : Pleaded not guilty
g) Final order : Convicted
h) Date of such order : 26.07.2012
i) Brief
statement of the reasons for the decision :
.....................Contd/
: 2 :
1.By way of this judgment, I shall dispose of complaint under Section 138 of Negotiable Instruments Act, 1881 filed by the complainant i.e. Barclays Investments & Loans (India) Limited through its authorized representative Sh. Gaurav Gothwal against the accused Jaydeep Vig S/o Late Sh. Darshan Lal, R/o D - 253/1, Near Durga Mandir, Gali No. 01, Rama Vihar, New Delhi - 110 081.
2. The brief facts of this case as per allegations of the complaint are that the complainant i.e. Barclays Investments & Loans (India) Limited is a Company duly incorporated under the Companies Act, 1956 and the complainant was formerly known as Rank Investments & Credit (India) Limited, however, the name of the complainant was changed to Barclays Investments & Loans (India) Limited w.e.f. 27.06.2008. On the representation of the accused and upon agreeing to various written terms, conditions and execution of agreement number LC011311001169181, the complainant granted a loan facility to the accused person. As per complaint, it is alleged that accused in partial discharge of his legal debt/liability, issued three cheques bearing numbers 703722, 703723 and 703724 each dated 03.05.2010, each for sum of Rs.3,206/ drawn on State Bank of Patiala in favour of the complainant. It is further alleged in the complaint that complainant presented the abovesaid cheques for encashment to its banker namely Barclays Bank PLC, New Delhi which were returned dishonored vide cheques returning memos each dated ....................Contd/ : 3 : 07.05.2010 with reasons ''Funds Insufficient''. It is further alleged in the complaint that complainant served upon the accused a Legal Demand Notice dated 20.05.2010 dispatched on 22.05.2010 through its advocate thereby demanding the payment of abovesaid cheques amount within 15 days from the receipt of the said notice. It is further alleged in the complaint that accused failed to pay the amount of the dishonored cheques within stipulated time. Accordingly, this complaint was filed by the complainant on 08.07.2010.
3. After filing of complaint, authorized representative of the complainant namely Sh. Gaurav Gothwal led his presummoning evidence by way of affidavit and after hearing Ld. Counsel for complainant, summoning order was passed against the accused vide order dated 08.09.2010 and after the appearance of accused, a separate notice under Section 251 of Cr. P.C. was put to the accused on 24.06.2011 to which accused pleaded not guilty and claimed trial. Thereafter, matter was fixed for complainant evidence and crossexamination of complainant witness.
4. To prove the case of complainant, Sh. Gaurav Gothwal, AR of the complainant got examined himself as complainant witness and tendered his post summoning evidence by way of affidavit Ex.CW1/X and relied on the documents Ex.CW1/1A (Power of .....................Contd/ : 4 : Attorney) exhibited on 31.05.2012, Ex.CW1/2 to Ex.CW1/10 already exhibited in pre summoning evidence and further reiterated the contents of the complaint on oath before this Court. The power of attorney is exhibited as Ex.CW1/1, original cheques as Ex.CW1/2 to Ex.CW1/4, cheque returning memos as Ex.CW1/5 to Ex.CW1/7, Legal Demand Notice as Ex.CW1/8, original postal receipt as Ex.CW1/9 and complaint under Section 138 of Negotiable Instruments Act, 1881 is exhibited as Ex.CW1/10. Thereafter, the witness of the complainant was cross examined by Sh. Mayank Sharma, Ld. Counsel for the accused from DLSA. After crossexamination, complainant's evidence was closed on the statement of the AR of the complainant on 31.05.2012 itself.
5. After that the statement of accused was recorded under Section 313 of Cr. P.C. r/w Section 281 of Cr. P.C. in which all incriminating evidence alongwith exhibited documents were put to the accused Jaydeep Vig in which he admitted that he had availed loan from the complainant bank vide loan agreement number LC011311001169181. It was further stated by the accused person that he issued the cheques in question as blank signed cheques for the purpose of payment of EMIs. In answer to another question, whether the cheques were dishonored vide returning memos Ex.CW1/5 to Ex.CW1/7 with the reasons "Funds Insufficient", the accused admitted that the cheques were returned dishonored due ....................Contd/ : 5 : to abovesaid reason vide abovesaid returning memos as his business was collapsed. The accused person submitted that he had not received any Legal Demand Notice as alleged by the complainant. In answer to another question in his statement under Section 313 of Cr. P.C. r/w Section 281 of Cr. P.C., the accused stated that he wants to lead defence evidence.
6. On the statement of the accused on 20.07.2012, the defence evidence of accused was closed. Thereafter, the matter was fixed for final arguments.
7. I have heard Ld. Counsels for both the parties and I have also perused the entire record of the case file and evidence on record.
8. Following Points arise for determination by this court :
(1) Whether complainant has proved on record the essential ingredients of offence under Section 138 of Negotiable Instruments Act, 1881 against the accused?
(2) Final order.
9. Point No. (1) - To bring home the conviction of the accused for offence Under Section 138 of Negotiable Instrument Act, 1881, the complainant has to prove the following : ....................Contd/ : 6 :
(a) The cheques were drawn/issued by the accused person to the complainant on an account maintained by him with the bank.
(b) The cheques were issued in discharge of, in whole or in part of any legal debt or other liability.
(c) The cheques were presented to the company within a period of six months or within period of its validity.
(d) The cheques so presented for encashment were dishonoured.
(e) The payee/complainant of the cheques issued a Legal Demand Notice within 30 days from the receipt of information from the company regarding dishonourment of the cheques.
(f) The drawer of the cheques failed to make the payment within 15 days of receipt of aforesaid Legal Demand Notice.
It is pertinent to mention here that the complainant has to prove all of the above ingredients simultaneously on record to secure conviction of the accused person.
The AR of the complainant in his examinationinchief by way of affidavit has deposed in his affidavit Ex.CW1/X that the accused person approached the complainant and ....................Contd/ : 7 : requested for grant of loan and the complainant granted loan to the accused vide loan agreement number LC011311001169181. It is further deposed in the affidavit Ex.CW1/X that towards partial discharge of legally recoverable amount and in pursuant to the above said loan, the accused issued three cheques Ex.CW1/2 to Ex.CW1/4 drawn on State Bank of Patiala in favour of complainant. It is further deposed in his affidavit Ex.CW1/X that the complainant presented the cheques in question for encashment and the same were returned dishonored vide cheques returning memos Ex.CW1/5 to Ex.CW1/7 each dated 07.05.2010 with the reason "Funds Insufficient". The AR of the complainant has further deposed in his affidavit Ex.CW1/X that after that the complainant sent a legal demand notice Ex.CW1/8 through its advocate vide speed post receipt Ex.CW1/9 dated 22.05.2010 to the accused person thereby demanding payment of cheques amount in question within 15 days of receipt of notice. It is further deposed by AR of the complainant in his affidavit Ex.CW1/X that the accused has not made the payment of cheques in question till date despite service of legal notice.
As per oral submissions, notice under Section 251 of Cr. P.C., statement under Section 313 of Cr. P.C. r/w Section 281 of Cr. P.C. and evidence on reocrd, the accused person has taken following defences in this case : .....................Contd/ : 8 :
1. That the cheques in question are security cheques given by him as blank signed cheques to the complainant.
2. That he has not received any legal demand notice.
Now, this Court is considering the 1st defence/contention of the accused person that the cheques in question were given by him as blank signed cheques along with other cheques for purpose of security. During the course of final arguments, the Ld. Counsel for the accused person from DLSA argued that since all the cheques in question bear same date i.e. 03.05.2010, therefore, the same does not pertain to payment of EMIs and further that if the accused had to make payment of Rs.9,618/ to the complainant on the 03.05.2010 then he would have issued a single cheque of Rs.9,618/ and therefore, it relents support to the case of the accused person that the complainant has misused the security cheques given by the accused person. The Ld. Counsel for the accused further argued that since the AR of the complainant has admitted in his crossexamination that the cheques in question were handed over by the accused person to the complainant at the time of disbursal of loan, therefore, it also supports the case of the accused person.
First of all, lets discuss the law on security cheques. On security cheques in the matter of Collage Culture & Ors. Vs. Apparel Export Promotion Counsil reported 2007 ....................Contd/ : 9 : (99) DRJ 251 in Crl. M. C. No. 3011/2004, Hon'ble High Court of Delhi has held as under :
"It is urged that no actionable cause exists in favour of the complainant to make out the offence under Section 138 of Negotiable Instruments Act, 1881. It is urged that the sine qua non for the applicability of Section 138 of Negotiable Instrument Act, 1881 is the issuance of cheque for a debt which is due towards discharge of a liability. It is urged that a cheque given as a collateral security or as a security for payment of an amount which may become payable at a future date upon the happening or the nonhappening of an event i.e. towards a contingency can not be the foundation of an action under Section 138 of Negotiable Instruments Act, 1881."
"It would be relevant to note that the statute does not refer to the debt being payable, meaning thereby, a post dated cheque for a debt due, but payment postponed at a future date would attract Section 138 of the Negotiable Instruments Act, 1881. But, the cheque issued not for an existing due, but issued by way of a security, would not attract Section 138 of the Negotiable Instruments Act, 1881, for it has not been issued for a debt which has come into in existence."
I have gone through the crossexamination of the AR of the complainant and the case of the accused is that the accused issued some blank signed cheques to the complainant for the purpose of security and cheques in question are amongst them. It is pertinent to mention here that the accused person has submitted in his statement under Section 313 of Cr. P.C. r/w Section 281 of Cr. P.C. that he issued blank signed cheques for purpose of payment of EMIs, therefore, the accused person has been taking different stands at different stages of trial. The deposition of the AR of the complainant that the accused handed over cheques in question to the complainant at the time of disbursal of loan is also not controverted by the accused person. It appears that the accused person has taken this .....................Contd/ : 10 : defence only for purpose of taking defence as it is not the case of the accused person that cheques in question were given before the disbursal of loan to him and before his liability has actually become due. So, the law laid down by the Hon'ble High Court of Delhi in the matters of Collage Culture & Ors. Vs. Apparel Export Promotion Counsil reported 2007 (99) DRJ 251 in Crl. M. C. No. 3011/2004 and reiterated in "Ravi Kumar D......... Vs. State of Delhi & Anr." passed on 01.03.2011 is not applicable to the present facts and circumstances of this case and we have to fall back on the presumption provided under Section 118 (b) of Negotiable Instrument Act, 1881 as to date. In view of the law and reasons discussed above, the accused has not being able to rebut the presumption as to date provided under Section 118 (b) of Negotiable Instrument Act, 1881, therefore, the defence of the accused that the cheques in question were given by him as security is hereby rejected.
The law on blank signed cheques as laid down by Hon'ble High Court of Delhi in the matter of "Ravi Chopra Vs. State & Anr." decided on 13.03.2008 in paragraphs number 15 to 21 is as under : Para 15 : "What appears to be clear from the above definitions that an essential feature of a cheque is that it has to be signed by the maker. This signing of the cheque need not be by hand alone. After the amendment to Section 6 in 2002, the NI Act acknowledges that there can be an electronic cheque which can be "generated, written and signed in a secure system." Nevertheless, the signing of the cheque is indeed an essential feature. But what about the other material particulars? Can the word "cheque" occurring in Section 138 NI Act include a blank cheque which is signed by the drawer but the material particulars of which are left unfilled at the time it was handed over to the payee? ................................."
....................Contd/ : 11 : Para 16 : ".................................Section 87 - Effect of material alteration : .................................The provisions of this section are subject to those of Sections 20, 49, 86 and 125."
Para 17 : "While it is correct that in terms of the above provision, any material alteration to a cheque without the consent of the drawer unless it is made to carry out the common intention of the original parties thereto renders the cheque void, the expression "material alteration" has not been defined. Significantly, Section 87 has been made subject to Sections 20, 49, 86 and 125 NI Act. These provisions help up to understand what are not considered 'material alterations' for the purpose of Section 87." Para 18 : "Section 20 NI Act talks of "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." Section 49................................." Para 19 : "The above provisions have to be read together with Section 118 NI Act which sets out various presumptions as to negotiable instruments. The presumption is of consideration, as to date, as to time of acceptance, as to transfer, as to endorsement, as to stamp. The only exception to this is provided in proviso to Section 118 which reads as under :
Provided .................................."
Para 20 : "A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Act which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a 'material alteration' for the purposes of Section 87 NI Act. What however is essential is that the cheque must have been signed by the drawer. If the signature is altered or does not tally with the normal signature of the maker, that would be a material alteration. Therefore as long as the cheque has been signed by the drawer, the fact that the ink in which the name and figures are written or the date is filled up is different from the ink of the signature is not a material alteration for the purposes of Section 87 NI Act." Para 21 : "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 ....................Contd/ : 12 : cheque, amount and the name has been written not be 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. In the instant case Bank has never found that the cheque was tampered with or forged or there is material alteration or that the handwriting by which the payee's name and the amount was written was differed. The Bank was willing to honour the cheques if sufficient funds were there in the account of the drawer even if the payee's name and the amount was written by somebody else other than the holder of the account or the drawer of the cheque. The mere fact that the payee's name and the amount shown are not in the handwriting of the drawer does not invalidate the cheque. No law provides in the case of cheques the entire body has to be written by the drawer only. What is material is the signature of the drawer and not the body of the instrument. Therefore when the drawer has issued the cheque whether the entire body was written by the drawer written beyond the instructions of the drawer, whether the amount is due or not, those and such matters are defenses which drawer has to raise and prove it. Therefore the mere fact that the payee's name and the amount shown in the cheque are in different handwriting is not a reason for not honouring the cheque by the Bank. Banks would normally see whether the instrument is that of the drawer and the cheque has been signed by the drawer himself. The burden is therefore entirely on the drawer of the cheque to establish that the date, amount and the payee's name are written by somebody else without the knowledge and consent of the drawer. In the instant case, the drawer of the cheque has not discharged and burden. Apart from the interested testimony of the drawer, no independent evidence was adduced to discharge the burden."
So, in the light of the abovesaid law, even if, for the sake of arguments, we may presume that the cheques in question were given by the accused as blank signed cheques to the complainant, even then, it is no defence in the eyes of law.
Now, this Court is considering the second limb of this defence of the accused person that since all the cheques in question bear same date i.e. 03.05.2010 and further since, .....................Contd/ : 13 : each cheque is of Rs.3,206/, therefore, the accused could have issued a single cheque of Rs. 9,618/ to the complainant on 03.05.2010 for payment of Rs.9,618/ instead of issuing three cheques of Rs.3,206/ each. The Ld. Counsel for the accused from DLSA further made submissions during the course of final arguments that it also supports the case of the accused person that the complainant has misused the security cheques.
I have considered this contention of the accused person, though there is little substance in this contention of the accused person, but, in the opinion of this Court, it's the sweet will of the drawee to issue a single cheque or number of cheques for payment of same amount and there is no legal bar as such on the issuance of number of cheques for payment of same amount for which a single cheque could have been issued and further in the opinion of this Court, it is not itself sufficient to rebut the presumptions of consideration provided under Section 118 (a) and Section 139 of Negotiable Instruments Act, 1881 and presumption as to date provided under Section 118 (b) of Negotiable Instruments Act, 1881. In view of these discussions, this contention/defence of the accused is also hereby rejected.
Now, this Court is considering the 2nd defence/contention of the accused person that he has not received the legal demand notice. This Court sees no substance in this defence of the accused person also as the accused person has not disputed the correctness of .....................Contd/ : 14 : the address mentioned on the legal demand notice and he has himself mentioned the same address as his address in his bail bond and in notice under Section 251 of Cr. P.C. and it is also not the case of the accused person that the legal demand notice was never sent by the complainant to his correct address. In these circumstances, where the sending of the legal demand notice to the correct address is not disputed by him then the defence that he has not received any legal demand notice is no defence in the eyes of law in view of the judgment passed by Hon'ble Supreme Court of India in the matter of "C. C. Alavi Hazi Vs. Palapetty Mohd. & Anr." reported in (2007) 6 Supreme Court Cases 555. In this judgment, the Hon'ble Supreme Court of India has held that : "Any drawer who claims that he did not received the notice sent by post, can, within 15 days of receipt of summons from the court in respect of complaint Under Section 138 of the Act, make the payment of the cheque amount and submit to the court that he had made the payment within 15 days of the receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complainant is liable to be rejected. A person who does not pay within 15 days of receipt of summons from the court alongwith the copy of complaint Under Section 138 of the Act, can not 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 G. C. Act and 114 of the Evidence Act."
In this case the accused person has not brought any evidence to prove that legal demand notice was not in fact served upon him and admittedly he has not made the payment of cheques in question till date, therefore, in the light of the abovesaid judgment .....................Contd/ : 15 : and discussion, this Court is of the opinion that the defence of the accused that he has not received any legal demand notice is without any force and is hereby rejected.
No other major contention/defence was raised by the accused person at the time of final arguments.
10. (ii) Final order :
In view of abovesaid discussions, I am of the considered opinion that complainant has proved all ingredients of offence under Section 138 of Negotiable Instruments Act, 1881 beyond shadow of any reasonable doubt against the accused.
Accordingly, accused Jaydeep Vig S/o Late Sh. Darshan Lal, R/o D - 253/1, Near Durga Mandir, Gali No.01, Rama Vihar, New Delhi - 110 081 stands convicted for the offence under Section 138 of Negotiable Instruments Act, 1881.
Copy of the judgment be supplied to the accused free of cost.
Announced in the open Court on this day of July 26, 2012.
(HARVINDER SINGH) Spl. M.M.05/Dwarka Courts, New Delhi/26.07.2012