1 IN THE HIGH COURT OF BOMBAY AT GOA. CRIMINAL APPEAL NO. 68 OF 2009 VPK Urban Co-operative Credit Society Limited, with its Head Office at Mardol, Ponda-Goa, duly represented herein by its Legal Officer, Ms. Ratna S. Amonkar, major in age, service, residing at Caranzalem, Panaji-Goa. .. Appellant v e r s u s 1. Shri Santosh Datta Pednekar, 'Mangirish Darshan', Mangeshim, Mardol, Ponda-Goa. 2. STATE OF GOA, through its Public Prosecutor, High Court of Bombay, at Goa. .. Respondents Shri D. Pangam Advocate for the appellant. Shri K. Kerkar, Advocate for the respondent no.1. CORAM: N. A. BRITTO, J. DATE : 16TH SEPTEMBER, 2009. 2 ORAL JUDGMENT 1. This is a complainant's appeal and is directed against Judgment dated 24.11.08 of the Learned JMFC acquitting the accused under Section 138 of the Negotiable Instruments Act, 1881. 2. The complainant is a registered Co.operative Society governed by the Maharashtra Co.operative Societies, 1960, as applicable to the State of Goa and is in the business of accepting deposits and advancing loans. The accused is one of the members of the complainant. 3. The complainant filed the complaint on the allegation that the accused who was one of the members/customers of the complainant was advanced a loan of Rs.2,50,000/- which was payable with interest in installments under the terms and conditions stipulated in the agreement. The complainant stated that the accused committed defaults in payment of the installments, inspite of repeated requests, and towards part payment of his liability the accused had in the past issued certain post 3 dated cheques with request to present the same as and when they were due and one of such cheques was a cheque bearing no.771240 dated 31.3.2007 for Rs.30,000/- drawn on HDFC Bank Limited, Panaji, in favour of the complainant towards part payment of the said installments and when the complainant presented the said cheque for realization the same was returned unpaid on 5.4.07 as the account was closed whereupon the complainant sent a legal notice dated 18.4.2007 calling upon the accused to pay the amount due on the said cheque within fifteen days which the accused received on 19.4.07 but the accused failed and neglected to pay the amount due and as such the complaint was filed against the accused. 4. The complaint was filed by one Ajay A. Kunkolkar, the Account Officer of Mardol Branch of the complainant and it was filed pursuant to a resolution of the complainant dated 16.9.06 and a letter of authority given by the General Manager of the complainant dated 7.10.2006. However, in the course of the trial who was examined was one Ratna Shripad S. Amonkar pursuant to another resolution of the complainant dated 10.6.07 and another letter of authority issued in her 4 favour by the General Manager of the complainant. 5. On the basis of the said resolution as well as authority letter the said Ratna Shripad S. Amonkar filed her affidavit in evidence on 14.11.2007 and reproduced the facts stated in the complaint and produced the said resolution as well as the letter of authority dated 10.6.07 and 11.7.07, respectively, alongwith the other documents including the cheque, the cheque return memo, etc. 6. The case of the accused was that the cheque was issued as security. The accused initially stated that he would examine himself but later did not examine himself. The complainant's witness, the said Ratna Amonkar had also produced the loan agreement entered into between the complainant and the accused by which a sum of Rs.2,50,000/- was advanced to the accused repayable on or before 14.9.2006 in 60 installments of Rs.7,000/- per month, the first installment being repayable on or before 14.10.2001 with interest at the rate of 19% and in case there was a default, the accused was liable to pay the whole of outstanding amount together with interest due thereon 5 in terms of the demand pro-note dated 14.9.2001. In the course of cross examination it was suggested to the complainant's witness that the entire amount was recovered by the complainant by cheque dated 25.9.2005, a suggestion which she denied. It was also suggested to her that a false complaint was filed which again she denied. It was also suggested to her that she had no authority to depose on behalf on the complainant which suggestion too, she denied. The accused also suggested that the loan was not disbursed by the complainant to the accused which suggestion she also denied. As already stated, the accused did not enter in the witness box. 7. The Learned Magistrate relied upon a decision of this Court in the case of Mrs. Alka Toraskar V/s. State of Goa and others {2007 (1) Goa L.R. 1591} and held that the alleged letter of authority given to Ajay Kuncolkar was not produced. The Learned Magistrate also held that the complainant's witness, the said Ratna Amonkar had also not produced any authorisation letter or resolution authorising the said Ajay Kuncolkar to file the present complaint, and relying on the aforesaid decision, came to the conclusion that the complaint itself could not have 6 been entertained at the initial stage, as no authority letter authorizing the said Ajay Kuncolkar to file the complaint was produced. The Learned Magistrate also held that the complaint in this case was filed in the name of the payee which was a Co-operative Credit Society which is a legal entity and the complaint which was signed by Ajay Kuncolkar was filed by him without any authority, as in the letter of authority produced by him, no power was given to him to file a criminal complaint against the accused nor any other document had gone in the evidence to prove that the said Ajay Kuncolkar had authority to file the complaint, against the accused, in the first place and in the absence of such authorisation the complaint was not maintainable and could not have been entertained and on that ground alone the complaint was liable to be dismissed. The Learned Magistrate entirely lost sight of the fact that the resolution dated 10.6.07 had also authorised the said Ratna S.S. Amonkar to continue with the criminal matters filed by Ajay A. Kuncolkar. 8. Admittedly, and initially the complaint was filed on behalf of the complainant by the said Ajay A. Kuncolkar based on the resolution of the complainant dated 16.9.06 and letter of authority dated 7.10.06 and 7 thereafter process was issued to the accused. It can be seen from the said resolution as well as the letter of authority that the said Ajay A. Kuncolkar was authorised "to file a complaint, civil suit, execution application”, etc. on behalf of the Society and to appear, depose and to pursue the said case till it reaches its finality". Admittedly also, in the course of the trial it is the said Ratna Amonkar who deposed on behalf of the complainant pursuant to a resolution dated 10.6.07 as well as the authority letter dated 11.7.07. The said resolution reads as follows:- “Resolved to authorise Miss Ratna Shripad Sawant Amonkar legal Officer attached to the Mardol branch of the Society to continue, pursue, represent the Society, to verify and to depose, with all the matters either criminal or civil already filed by the Society and pending in various Courts of law through Shri Ajay Anant Kunkolkar, Shri Nilesh Raghunath Mardolkar, Shri Ankush Kuttikar and/or Mrs. Smita Narayan Patki, as also to file, verify, depose, represent and pursue with all the cases either criminal or civil to be filed by the Society till they are finally disposed off” (emphasis supplied names shortened). 9. The said letter of authority mentions that under letters of authority Shri Ajay A. Kuncolkar, etc. were authorised to file, appear and depose in any criminal or civil matters filed by the Society but for the 8 purpose of convenience it is now resolved to authorise the said Miss Ratna S. Sawant Amonkar, Legal Officer attached to the Mardol branch of the Society to continue, pursue, represent the Society, to verify and depose, with all matters either criminal or civil already filed by the Society and pending in various Courts of law through Shri Ajay A. Kuncolkar, Shri Nilesh R. Mardolkar, etc. 10. Shri D. Pangam, the Learned Counsel on behalf of the complainant submits that the Learned Magistrate has confused the facts of another case filed by the complainant and has not perused either of the resolution dated 16.9.06 given in favour of Ajay A. Kuncolkar or and dated 10.6.07 given in favour of Miss Ratna S.S. Amonkar. Learned Counsel further submits that the Learned trial Court also did not refer to other documents produced on behalf of the complainant including the loan agreement by which the accused was given a loan of Rs.2,50,000/-. Learned Counsel further submits that the accused has not at all cross examined the complaint's witness on the giving of a post dated cheque which was given by the accused duly completed for part payment of the loan taken by him. Learned Counsel further submits that the accused 9 received the notice but did not come with any reply to it suggesting that whatever the complainant had alleged was not true. Learned Counsel further submits that there is also no challenge in the cross examination that the complaint as filed by Ajay Koncolkar was otherwise not maintainable. Learned Counsel submits that there is no challenge from the accused as regards the loan agreement entered into by him and produced by the complainant in his evidence. Learned Counsel further submits that the accused has taken mutually destructive defences in that, first it is suggested to the complainant's witness that no loan was taken and then it was suggested that the entire loan was paid by virtue of a cheque. 11. On the other hand, Shri K. Kerkar, the Learned Counsel on behalf of the accused, refers to the notice sent by the complainant and submits that the subject cheque was one of several cheques given by the accused at the time of the disbursement of loan. Learned Counsel further submits that the subject cheque was given by the accused as security and being so no complaint under Section 138 of the said Act was maintainable and in this regard Shri Kerkar has placed reliance on 10 the case of Sudhir Kumar Bhalla V/s. Jagdish Chand and others {(2008) 7 SCC 137}. Learned Counsel has further submitted that in a similar case where the loan agreement was not produced, the Delhi High Court had held that the presumption available to the complainant was rebutted and has placed reliance on the case of Raman Finance Corporation V/s. Harmeet Singh {2009 (1) BCR 306}. Learned Counsel further submits that in case according to the complainant the loan was repayable by monthly installments of Rs.7,000/-, it is not understood as to how a cheque for Rs.30,000/- came to be issued by the accused. He further submits that the resolution dated 16.9.06 as well as letter of authority dated 7.10.06 does not refer to filing a criminal complaint but only to a complaint which means that Shri Kuncolkar had no authority to file a criminal complaint. Learned Counsel further submits that a post dated cheque could also be considered as a cheque given as security. Learned Counsel further submits that the said complainant's witness Ratna Amonkar had not produced in her evidence the first resolution dated 16.9.06 and the letter of authortiy dated 7.10.06 which were earlier given in favour of the said Ajay A. Kuncolkar and as such there was no occasion for the accused to dispute the said two 11 documents. Learned Counsel further submits that nothing prevented the complainant from examining the said Kuncolkar instead of the said Amonkar in support of their case. Learned Counsel further submits that the complainant also did not produce a statement of account of the loan transaction between the complainant and the accused and the absence of it would also be sufficient to rebut the presumption. 12. The case of Sudhir Kumar Bhalla (supra) is a case which was remanded for reconsideration by the High Court because the legal question was not addressed by the High Court whether criminal liability of the appellant/accused under the provisions of Section 138 of the Act was attracted only on account of the dishonour of the cheques issued in discharge of liability or debt, but not on account of issuance of cheques as security. In the case of Rama Finance Corporation, the complainant had not produced any account in support of the submission that the loan was advanced to the accused and had even failed to produce the loan agreement and it is in such circumstances that the High Court held that the presumption in favour of the complainant stood rebutted and it was further held that it is not required that the accused must lead 12 positive evidence to rebut the presumption which could be rebutted from the circumstance on record. Both the decisions, therefore, stood on their own facts and as such would be inapplicable to the case at hand. 13. In the case at hand, on behalf of the complainant, loan agreement was produced and the accused only took self destructive pleas, one in that no loan was ever disbursed to him and the other that it was repaid by cheque dated 25.9.2005 but made no further effort to show his pass book that indeed such payment was made in favour of the complainant. Mere putting suggestions may at the most disclose a defence of the accused but suggestions put in cross examination cannot be considered as evidence. The complainant's case was very clear that the subject cheque was a post dated cheque given by the accused towards part payment of the loan. Except for a bare suggestion that it was given as security, the accused did not give any further explanation. A bare suggestion that a cheque is given as security cannot be accepted to say that indeed it was given as security without any further explanation as to how that security was to operate. The accused having given the subject cheque as a post dated cheque, the complainant was entitled to, 13 after the date shown thereon to encash the cheque and credit the proceeds to the loan account of the accused. The accused at no time disputed the giving of the said cheque. Since the cheque was completed by the accused in all respects and in any event there was no dispute raised regarding it, it is the accused who ought to have known why he gave the cheque in the sum of Rs.30,000/- when the accused was required to pay monthly installments of Rs.7,000/- and not the other way round. A duly completed cheque having been issued by the accused in favour of the complainant, the complainant was entitled to all presumptions in his favour available to the complainant in terms of the relevant provisions of the said Act that the cheque was given in discharge of the liability of the accused towards the complainant. The presumptions available cannot be rebutted by bare suggestions to the complainant's witness which were denied on behalf of the complainant. 14. There is no dispute that the complaint was filed by Shri Ajay Anant Kuncolkar pursuant to a resolution dated 16.9.06 and letter of authority dated 7.10.06 and on the basis of the same that process came to be issued to the accused. The authority of the said Ajay Kuncolkar was 14 not questioned in the course of the evidence of the complainant's witness the said Ratna Amonkar and therefore there was no occasion for the said Ratna Amonkar to have produced the said resolution dated 16.9.06 or letter of authority dated 7.10.06. Had the accused disputed the authority of the said Kuncolkar that only the complainant might have been required to produce the resolution in favour of the said Kuncolkar. As long as there was no challenge to his authority, the complainant was not required to produce the resolution dated 16.9.06. The authority to file 'a complaint' in the circumstances of the case could have referred to filing a criminal complaint and not any other complaint to any other authority. Even if anything was missing in the said resolution dated 16.9.06 or the letter of authority dated 7.10.06 in favour of the said Ajay Anant Kuncolkar who originally filed the complaint, the same was made good by the complainant by virtue of the resolution dated 10.6.07 and letter of authority dated 11.7.07 by which the said Ratna S. S. Amonkar was clearly authorised to continue and pursue all matters either criminal or civil earlier filed through the said Ajay Anant Kuncolkar and others. In other words, even if the said Kuncolkar had no authority, the said authority was made good by the subsequent resolution in favour of Ratna 15 S.S. Amonkar. There is no dispute that the complaint was filed on behalf of the complainant which is a Co-operative Society and who should represent it at any given time is the business of the said Society. Only because earlier it was represented by the said Kuncolkar it does not mean that at all times the complainant ought to have been represented by him alone and it was entirely for the complainant to decide as to who should represent them in the course of the trial. The submission that the said Ajay Kuncolkar who had filed the complaint or the said Ratna S.S. Amonkar who pursued and gave her evidence on behalf of the complainant had no authority could not therefore have been accepted. 15. In the case at hand, there were two sets of resolutions given at two different times first in favour of the said Kuncolkar enabling him to file a complaint and later in favour of said Ratna S. Amonkar to continue the complaint filed by him and depose in support of the same and being so the ratio of Mrs. Alka Toraskar (supra) was clearly inapplicable to the facts of the case. 16. As a result, it must be held that the complainant had proved its 16 case against the accused under Section 138 of the Act for which the accused is hereby held guilty under Section 138 of the said Act. 17. Shri Pangam, Learned Counsel on behalf of the complainant submits that the loan was of Rs.2,50,000/- and the cheque was of Rs.30,000/- and till date nothing has been paid by the accused. Learned Counsel further submits that the conduct of the accused also has to be seen in that not only the accused has not paid any installments but took mutually destructive defences. Learned Counsel further submits that the accused was required to pay the installments with interest of 19% and that on the loan amount the interest works out to Rs.15,000/- per year and total interest payable itself will be over Rs.1,30,000/- without considering that the interest was payable on compounding basis. Learned Counsel further submits that atleast 15 days imprisonment be imposed on the accused. 18. On the other hand Shri Kerkar, Learned Counsel on behalf of the accused submits that the accused is the only bread winner of the family. He further submits that the Court may consider in imposing a 17 token imprisonment till rising of the Court and the accused will pay the cheque amount as well as compensation, if given some time. 19. I do not think that there are at all any mitigating circumstances in favour of the accused in this case. The loan was taken of Rs.2,50,000/- on 14.9.2001 and Shri Pangam submits that no installment has been repaid. The subject cheque is dated 31.3.07 and even thereafter the accused has made no attempt to pay any amount. Although a dishonour of cheque was made a punishable offence w.e.f. 1.4.89 and then punishment was enhanced on 6.2.2003 from one year to two years, the desired message does not appear to have gone to the drawers of cheques and people continue to make money depriving others from the same. One may argue that in this case the complainant is a Credit Society but even then no amount of the loan taken appears to have been paid and the only cheque issued has been dishonoured. 20. The Act ( N.I. Act, 1881) was enacted in public interest and its object was to enhance the acceptability of cheques in settlement of liability by making the drawer liable for penalties in certain cases while 18 at the same time providing adequate safeguards to prevent harassment of honest drawers, as the evil practice of issuing cheques in settlement of disputes without there being adequate amount in the accounts had become rampant. Today, in most cases, frivolous defences are taken, such as in this case only to delay making of payment, often to make money out of money by depriving the complainant what was due to him and tire the complainant and after several years pay the amount of the cheque and compound the case. The complainant who is ultimately interested in his money, in many a cases, succumbs to this blackmail and in the process much public time is wasted which also costs public money plus costs to the complainant to pursue the litigation. 21. Considering the facts of the case, therefore, it would be appropriate to sentence the accused under Section 138 of the Act to undergo 15 days S.I. and direct him to pay compensation of Rs.60,000/- to the complainant and in default to undergo 6 months S.I. 22. The accused to surrender before the Learned JMFC within 15 19 days from today to undergo the sentence. N.A. BRITTO, J. oc. 20