M/s Shriram Transport Finance Company Ltd vs State Of Uttarakhand And Another

Lok Pal Singh, J

Application for leave to appeal under Section 378 Sub-Section (4) of the Code of Criminal Procedure has been filed by the applicant/appellant, seeking leave to file the appeal against the judgment and order dated 31.08.2018, passed by learned Judicial Magistrate IInd, Haldwani, District Nainital in Criminal Case No.2845 of 2013, Shriram Transport Finance Company Ltd. Vs. Hayat Singh Kunwar, under Section 138 of the Negotiable Instruments Act, 1881.

Brief facts of the case are that the applicant/appellant filed a complaint under Section 138 of N.I. Act stating therein that the complainant is Branch Manager of M/s Shriram Transport Finance Company Ltd. The second respondent obtained a loan of Rs.1 Lakh to purchase a TATA Truck and an agreement was executed by him on 02.02.2008. A cheque No.029239 dated 30.04.2012 of an amount Rs.92,500/- of ICICI Bank was issued by him with an assurance that on presentation of the same in the bank, the payment will be made to the complainant company. When the cheque was presented in bank, the same was returned with an endorsement "funds insufficient" on 05.05.2012. Thereafter, a legal notice was issued to the second respondent on 17.05.2012. Despite service of notice the second respondent did not pay the aforesaid amount, then the complainant company was constrained to file a complaint under Section 138 of N.I. Act on 29.05.2012. The copy of the cheque, memo, copy of notice and bank statements were filed. An affidavit was filed under Section 200 Cr.P.C. The second respondent was summoned, who denied the allegations of complaint in its reply and stated that total amount of Rs.1,35,000/-against loan amount of Rs.1,00,000/- has been paid by him and a blank cheque was handed over to the complainant company at the time of taking loan. It is alleged that the complainant company itself got insured the vehicle twice and credited the amount of insurance in the loan account of respondent No.2. It is further contended that the complainant company has misused the cheque issued by second respondent. An affidavit filed in support of complaint does not depict the cheque No.029239, at the time of hearing, a certified copy of an affidavit of complainant company filed in another case No.739 of 2013 was filed. It was contended that under misconception, an affidavit was filed in the present complaint, which ought to have been filed in Complaint Case No.739 of 2013.

The learned Magistrate recorded the statements of second respondent under Section 251 and 313 Cr.P.C, wherein he denied the evidence adduced by the complainant company.

Learned Magistrate having heard the learned counsel for the parties and after perusal of the record, recorded the findings that the complainant company failed to prove the averments of complaint by adducing evidence as the complainant company has not supported the averments of complaint why cheque No.029239 has been presented before the bank after the period of three years. The learned Magistrate has further recorded the finding that the agreement was executed on 02.02.2008 and it does not reflect the impugned cheque number. The cheque has allegedly been issued on 30.04.2012, the learned Magistrate also recorded the finding that an amount of Rs.1,35,000/- has already been paid by the second respondent against the loan of Rs.1,00,000/-.

Learned counsel for the applicant would submit that since the cheque was issued in lieu of the loan amount, therefore, it could not be considered as security amount and learned Magistrate has committed illegality in dismissing the complaint. Reliance has been placed on the judgment of Hon'ble Apex Court in Don Ayengia Vs. State of Assam and another (2016)3 SCC 1. The relevant paragraphs of the judgment are extracted herein under:

"12. The difficulty arises only because the promissory note uses the words "security" qua the cheques. This would ordinarily and in the context in which the cheques were given imply that once the amount of rupees ten lakhs was paid, the cheques shall have to be returned. There would be no reason for their retention by the complainant or for their presentation. In case, however, the amount was not paid within the period stipulated, the cheques were liable to be presented for otherwise there was no logic or reason for their having been issued and handed over in the first instance. If non-payment of the agreed debt/liability within the time specified also did not entitle the holder to present the cheques for payment, the issuance and delivery of any such cheques would be meaningless and futile, if not absurd.

It is important to note that it was not a case where no debt or liability was determined or acknowledged to be payable. If cheques were issued in relation to a continuing contract or business where no claim is made on the date of the issuance nor any determinate amount payable to the holder, one could perhaps argue that the cheques cannot be presented or prosecution launched on a unilateral claim of any debt or liability. The present is, however, a case where the existence of the debt/liability was never in dispute. It was on the contrary acknowledged and a promise was made to liquidate the same within one month. Failure on the part of the debtor to do so could lead to only one result viz. presentation of the cheques for payment and in the event of dishonour, launch of prosecution as has indeed happened in the case at hand.

The argument that the respondent had no liability to liquidate the debt owned by Nazimul Islam has not impressed us. What is important is whether the cheques were supported by consideration. Besides the fact that there is a presumption that a negotiable instrument is supported by consideration there was no dispute that such a consideration existed inasmuch as the cheques were issued in connection with the discharge of the outstanding liability against Nazimul Islam. At any rate the endorsement made by the respondent on the promissory note that the cheques can be presented for encashment after 25-9-2007 clearly shows that the cheques issued by him were not ornamental but were meant to be presented if the amount in question was not paid within the extended period. The High Court in our view fell in error in upsetting the conviction recorded by the courts below who had correctly analysed the factual situation and applied the law applicable to the same. "

Learned Magistrate has not dismissed the complaint on this ground alone. Learned Magistrate has recorded the reasons that when the cheque was not issued in lieu of an agreement the complainant company failed to prove that the cheque was issued in lieu of loan amount and the legally recoverable amount was due against second respondent. The ratio of the judgment supra is not applicable in the facts of the present case. The reasons for dismissing the complaint are that the complainant company did not adduce any evidence to prove the averments of complaint.

Admittedly the complainant company has not filed an affidavit stating therein that cheque No.029239 was dishonored, rather mentioning another cheque number, an affidavit has been filed. A certified copy of the affidavit filed in another Complaint Case No.200 of 2012 has been filed. A certified copy of an affidavit filed in another complaint case could not prove the averment of the present case. A certified copy of an affidavit filed in another complaint is not admissible to prove the contents of the present case since the averments of the complaint were not proved by filing an affidavit or examining the Branch Manager of the complainant company before the Magistrate.

It is settled proposition of law that the complainant company or the prosecution has to prove its case, but in the present case the complainant company itself failed to prove any of the contents of its complaint by filing an affidavit or examining the complainant company itself. Thus, the contention of the learned counsel for the applicant/appellant has no substance.

I find no perversity and illegality in impugned order, dismissing the complaint. The application for leave to appeal is liable to be dismissed. The same is dismissed. Consequently, the appeal also stands dismissed.