Viren Jayantilal Sheth v. Gautam Keshavdev Nemani & anr.

Mr.Aabad H.H.Ponda, Advocate, for applicant(In all matters) Mr.S.V.Marwadi i/b.Mr.C.K.Pendse with Mr.P.Parsurampuria, Advocate, for respondent No.1 (In all matters) Ms.A.A.Mane, A.P.P, for the State (In Cri.Appln.Nos.3200/2006 to 3208/2006) Mr.Y.M.Nakhawa, A.P.P, for the State (In Cri.Appln.Nos.3209/2006 to 3213/2006) CORAM : K.U.CHANDIWAL, J. DATE : 13TH AUGUST, 2008 4 P.C. . Heard both counsels. Mr.Ponda while making emphasis to his points, thoroughly took me to the cross examination of the complainant, to the documents, to explain as to how stand of the accused is with a colour of dishonest defence and conduct of the accused is not worthy to accept what ever he has stated. He has pointed out legal notice dated 7th July, 1997 was served to the accused. However, in response to the questions under Sections 313 of the Criminal Procedure Code the accused disputed service of notice. The accused has also disputed his office address and the learned defence counsel pointed while opening Bank Account his address of 32, Apollo Street, Raja Bahadur Mansion, Fort, Mumbai – 400 023 was the same furnished at which address the notices were issued. In fact, the learned Judge, while dealing with this aspect, has not given importance to the issuance or non-issuance of the notice as he has accepted that notice was legally issued and 5 received by accused No.1. Therefore, such aspects though, canvassed by the complainant's counsel are not further discussed. Before criticising conduct of the accused, let us see the worthyness of the complainant to make such hue and cry against the accused. The complaint and examination-in-chief points that it was filed by Mr.Viren Jayantilal Sheth as constituted Power of Attorney of Smt.Chandan Jayantilal Sheth against Gautam Keshavdev Nemani and Mr.Rahul Gautam Nemani. The learned Judge on the application of the accused discharge/acquitted Mr.Rahul Gautam Nemani and the said Order is not challenged before any other Court.

2. In the complaint and as stated earlier in the examination-in-chief of Mr.Viren Jayantilal Sheth he states that he is aware and conversant with the facts of the case and transaction has taken place on behalf of his mother by him with the accused. In paragraph four he states his mother Smt.Chandan Jayantilal Sheth gave friendly loan of Rs.17,00,000/- to the accused on interest, and the 6 same was confirmed by his as “Client Control Account” issued for the year April, 1996 to March, 1997, signed by accused/authorized signatory. Such Client Control Account was produced by the complainant at Exh P-2. The complaint under Section 138 of the Negotiable Instrument Act obligates the complainant to disclose as to when he has given such friendly loan to the accused and particularly, to which of the accused as in the complaint obviously, the reference is to Mr.Rahul Nemani and Mr.Gautam Nemani. The complainant delibrately kept loop holes in the deposition at paragraph four. After reading of the complaint and the evidence, it is practically impossible for anybody to carve out exact date of the transaction of the hand loan which is a crucial and decesive factor. The Client Control Account to which a reference is given is also blur, seems to be of April, 1996 to March, 1997.

3. It was canvassed in paragraph five of the evidence that in discharge to the said liability the accused had issued cheque No.954481 dated 1st 7 April, 1997 for Rs.89,250/-and cheque No.400904 dated 2nd June, 1997 was for Rs.17,00,000/-. The legal notice dated 7th July, 1997 issued by the complainant is silent as the original transaction was of the year 1990 and giving cause for the complaint initiated for the cheques allegedly issued in the year 1997 even it does not refer to the Client Control Account. These basic facts suppressed by complainant demonstrate the oblique motives to take everybody by surprise.

4. The learned Metropolitan Magistrate basically noticed that issuance of the cheque and its presentation by the complainant was in relation to a time barred debt and in all the cases he did not approve Power of Attorney. For the present, observations in relation to Power of Attorney are not discussed as the findings of the learned Judge on this count are not in consonance to the record. The Power of Attorney was executed in the year 1994 and the evidence was recorded in the year 2005, while the mother has specified authorizing her son to carry out all the business activities on her 8 behalf and even to prosecute and file cases as referred in paragraph 18 of the said Power of Attorney which was tendered before the learned Judge.

5. The complainant's counsel took me to the Judgments reported in (2001) 8 Supreme Court Cases 458 in the matter of K.N.BEENA Versus MUNIYAPPAN AND ANOTHER, (2001) 6 Supreme Court Cases 16 in the matter of HITEN P. DALAL Versus BRATINDRANATH BANERJEE, 1999(4) ALL MR 452 in the matter of K. Bhaskaran Vs. Sankaran Vaidhyan Balan and anr. There cannot be quarrel on the legal proposition as enunciated in the said Judgments. In paragraph 9 in the matter of K. Bhaskaran Vs. Sankaran Vaidhyan Balan and anr., it is observed : “As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption.” 9

6. The learned counsel for the respondents invited my attention to the Order of the learned brother Judge dated 1st August, 2008 in Criminal Application No.4153 of 2007 in which the brother Judge has held that the loan was repayable on demand and it was open for the complainant to demand money at any time. In that case the cheques were undated and were given simultaneously with agreement and it was discussed that, such loan became time barred in the year 2003.

7. It is well settled, in all the cases it is not a legal mandate that the accused should necessarily step into witness box to rebut presumption. It is sufficient, if by way of cross examination or from the documents tendered by the complainant he satisfies the Court that presumption is rebutted as is legally required. It cannot be said that the Court should in the all cases blindly accept the presumption as contemplated under Section 139 of the Negotiable Instrument Act. If the cheques are prominently for a time barred debt, 10 without any revival letter or agreement, one should not bank upon the presumption envisaged under Section 139 of the Negotiable Instruments Act,

8. Let us examine important portion of cross examination. The last line refers “our original loan of the year 1990-91 was renewed from time to time. It is not true that the claim against the accused is time barred.” The complainant's witness in paragraph ten accepts “I had direct dealings with the accused. The accused requested me for loan. I do not possess document showing request from accused for loan. The loan was not provided for a specific period. There is no document showing the specific period of repayment of loan.” He accepted, the loan was extended from time to time by him and other family members and he has such loan confirmation letter showing extension of loan from time to time. The notice is silent about the client control account Exh.3. The replies of complainant signify that there was no agreement recording extension of time to pay a debt. If the 11 loan was extended time to time, it should be by a contract, however, barring bare words from complainant there is nothing to accept of any confirmation from accused.

9. The learned defence counsel canvassed that the client control account Exh.3 should be treated as and by way of an acknowledgement, as it bears signature of Mr.Gautam Nemani. A bare reading of “client control account”, by no stretch it can be said that there was any confirmationn of payment of a time barred debt. The payment of interest or entry will not by itself will be tentamount to acceptance of the liability, which was legally not in existence.

10. The claim that the transaction will be coming within the bracket of Section 25(3) of the Indian Contract Act, 1872 again is difficult to digest. Section 25(3) starts with agreement without consideration, void, unless it is in writing and registered or is a promise to compensate for something done or is a promise to 12 pay a debt barred by limitation law – An agreement made without consideration is void, unless :- (3) “It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits” In any of these cases, such an agreement is a contract. As stated earlier, definition of an agreement will not be coming to the rescue of the complainant to take benefit of the Section 25(3) of the Indian Contract Act, 1872

11. The learned counsel for the complainant criticized the findings of the learned Judge as to from where he got knowledge that there was transaction between the parties in the year 1990-

91. The relevant portion of the evidence is referred herein above, which necessarily draws inference which the learned Judge could read. It was open for the complainant to have explained indeed there was transaction atleast three years prior to 1997 to save limitation. No such attempt 13 at any time is made. Basic burden to establish the case under Section 138 of the Negotiable Instruments Act cannot be said to be discharged by simply producing cheque for a time barred debt. In Hiten Dalal's case, on peculiar facts, Hon'ble Lordship observed, “The appellant alone could have said why he had admittedly executed the said cheques, handed over to Bank and never asked for return”

12. Section 138 of the Negotiable Instruments Act contemplates that issuance of the cheque should be for a legally enforceable debt or other liability. From the record tendered before the Trial Court there is no document creating any linkage between loan transaction of the year 1990- 91 and issuance of cheque in the question in the year 1997. It cannot be said that the learned Judge has committed an error in not accepting the cheques to be issued in discharge of liability. Obviously, on the date of issuance of cheque in the year 1997, as stated earlier, there was no legally enforceable liability against the complainant. It 14 is curious, the so called revalidation is no where established to be within the period of limitation.

13. In 1956 BCI (0) 219 Division Bench of this Court in the matter of Chintaman Dhundiraj Vs. Sadguru Narayan Maharaj Datta Sansthan and ors, decided on 12th March, 1956 dealt with these aspects of course it was in relation to Civil Suits. The Division Bench observed that there is no acknowledgement of liability merely by giving a cheque which is dishonoured cannot be regarded as part payment within the meaning of Section 20, Limitation Act (old Act). The Judgment further refers “It is true that when a cheque is delivered to a payee in whole or part satisfaction of a liability and it is accepted the delivery of the cheque and acceptance thereof would be regarded normally as conditional satisfaction of the liability, and if the cheque is dishonoured, the original debt which was conditionally satisfied would be deemed to be revived.” However, there is no such contigency to speak that 15 there could be any revival of the debt by issuance of the cheque which came to be dishonoured, which were issued after lapse of period of limitation.

14. The learned counel for the complainant relied on the Judgment in the matter of Mamtadevi w/o.Prafullakumar Bhansali Vs. Pushpadevi w/o.Kailashkumar Agarwal & anr, reported in 2005 ALL MR (Cri) 3075 in which the learned single Judge has referred to the competence of filing a complaint and the complaint filed by Power of Attorney Holder, is observed to be meeting the requirements under Section 142 of the Negotiable Instruments Act.

15. The learned counsel for the complainant relied on the Judgment in the matter of Vijay Ganesh Gondhlekar v. Indranil Jairaj Damale, reported in 2008 CRI.L.J.657. In that case deposit receipts were renewed by accused from time to time under his signature and said acknowledgement was mentioning, date of repayment was extended. No such contigency is surfaced in the present case. 16

16. Since the complainant states the loan was extended from time to time by him or other family member, it was a legal obligation cast on him to produce such document and unfortunately there is no such document except so called client control account.

17. The learned counsel for the complainant relied on the Judgment of Kerala High Court in the matter of Ramakrishnan v. Gangadharan Nair & anr, reported in 2007 CRI.L.J.1486. The learned Judge referred to the provisions of Section 25(3) of the Indian Contract Act, 1872 and also Section 46 of the Negotiable Instruments Act, 1881. In that case the accused were convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and the learned Single Judge has modified and reduced the sentence to undergo imprisonment till rising of the Court and was directed by exercise of power under Section 357(3) of the Criminal Procedure Code to pay fine of Rs.3,50,000/- as compensation and in default to 17 undergo S.I. for a period of two months. It was also directed the entire amount of compensation on realisation shall be released to the complainant. The observations of the learned Judge of Kerala High Court, in my opinion, cannot be said to be inconflict with the observations in the matter of Vijay Ganesh Gondhlekar v. Indranil Jairaj Damale, reported in 2008 CRI.L.J.657 of this Bench.

18. Another aspect which is reflected in the cross examination of the complainant in paragraph ten is, in one of the cases the cheque of Rs.9,75,000/- was signed and issued by son of the accused and the cheque of Rs.42,374/- towards interest was signed and issued by the accused and identical position was noticed in all the cases. However, the learned Judge found that since accused No.1 was the owner of the firm, the signature of his son as authorized signatory will not be brining case against the said son of the accused and consequently, he was discharged.

19. The exhibiting of documents, particularly 18 the cheques by itself will not attract the presumption under Section 139 of the Negotiable Instruments Act, 1881 as, Section 138 will have to be read together. There is no controversy, that ordinarily an objection to the admissibility of evidence should be taken when it is tendered and not subsequently. The cheques in question which were sought to be proved by mere production, being itself inadmissible, in evidence, proof of its legality is not excluded and such objection will survive at all stages. Taking survey of entire evidence and the findings recorded by the learned Judge acquitting the accused cannot be said to be perverse and they need no interference. Hence, leave to appeal in all 14 cases is rejected. (K.U.CHANDIWAL, J.)