Full Judgment Text
$~5 to 8
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 04.01.2012
+ CRL.L.P. 371/2011
GHISA RAM (DECEASED) THROUGH: SH. LAXMI
NARAIN ..... Petitioner
Through: Mr.Sanjay Sharma, Advocate.
versus
SHAILENDER KUMAR SHARMA
..... Respondent
Through:
With
CRL.L.P. 372/2011
GHISA RAM DECD. THR. LAXMI NARAYAN
..... Petitioner
Through: Mr.Sanjay Sharma, Advocate.
versus
SAHILENDER KUMAR SHARMA
..... Respondent
Through:
With
CRL.L.P. 373/2011
GHISA RAM DECD. THR. LAXMI NARAIN ..... Petitioner
Through: Mr.Sanjay Sharma, Advocate.
versus
SHAILENDER KUMAR SHARMA
Crl.L.Ps. 371-374/2011 Page 1 of 9
..... Respondent
Through:
And
CRL.L.P. 374/2011
GHISA RAM DECD. THR. LAXMI NARAIN
..... Petitioner
Through: Mr.Sanjay Sharma, Advocate.
versus
SHAILENDER KUMAR SHARMA
..... Respondent
Through:
CORAM:
HON’BLE MR. JUSTICE M.L. MEHTA
M.L. MEHTA, J. (Oral)
+Crl.M.As. 10628/2011, 10722/2011, 10723/2011 & 10641/2011 (for
restoration)
Heard, in view of the reasons mentioned in the applications, the
applications are allowed and the leave petitions are restored to their
original numbers.
Applications stand disposed of.
Crl.L.Ps. 371-374/2011
1. These four leave petitions arise out of the separate judgments
th
dated 18 May, 2011 of the learned M.M. passed in four complaints
being CC Nos. 113/2011, 110/2011, 112/2011 & 111/2011 under
Section 138, Negotiable Instruments Act (hereinafter referred to as
Crl.L.Ps. 371-374/2011 Page 2 of 9
„Act‟). These petitions have been filed on behalf of Ghisa Ram
(deceased) through attorney Laxmi Narain against the impugned
judgments whereby the accused/respondent Shailender Kumar Sharma
was acquitted by the learned M.M. in all the four complaints under
Section 138 of the Act.
2. The aforesaid complaints were filed by Ghisa Ram and Laxmi
Narain as complainants No. 1 and 2. The material facts as gathered
from the record are that the complainant No. 1 in the complaint
namely Ghisa Ram had filed a civil suit against the accused/respondent
as well as one Om Prakash for possession, injunction and recovery of
damages. During the pendency of the said suit, complainant No. 1
Ghisa Ram executed a General Power of Attorney dated 3.7.2003 in
favour of the complainant No. 2 Laxmi Narain thereby authorizing him
to file and obtain the possession as well as the damages from the
opposite parties. The said suit came to be decreed vide order dated
12.8.2005 against accused Shailender Kumar Sharma, who was held
liable to pay to the complainant Ghisa Ram a sum of Rs. 5,06,600/-
along with damages, interest and cost. Thereafter, the complainant No.
2 Laxmi Narain acting as attorney of complainant No. 1 Ghisa Ram
filed an execution petition of the decree dated 12.8.2005. In execution
of the said decree, the goods of accused were seized from his shop No.
24, Babu Market, Sarojini Nagar, New Delhi. On the request made by
the accused, complainant No. 2 agreed to accept a sum of Rs. 3.50
lakhs towards full and final satisfaction of the decretal amount.
Consequently, accused/respondent paid a sum of Rs. 50,000/- in cash
and issued four cheques of Rs. 75000/- each in favour of the
Crl.L.Ps. 371-374/2011 Page 3 of 9
complainant No. 2, which on presentation, got dishonoured on account
of „Payment Stopped by Drawer”. Since the respondent/accused failed
to make payment after the statutory demand notice, the aforesaid four
complaints were filed under Section 138 of the Act. The plea taken by
the respondent/accused was that the blank cheques were obtained
under coercion and that subsequently, the name of the complainant
No.2 Laxmi Narain was filled. It was also his plea that a notice was
issued to Laxmi Narain not to present the said cheques.
3. The Trial Court found the following facts to be not disputed
between the parties:
(1) That there was a decree dated 12.8.2005 in favour of
complainant No.1 i.e. Ghisa Ram and against accused for possession
and recovery of amount of Rs.5,06,600/-.
(2) That the cheque in question bears the signatures of accused
and it was issued towards satisfaction of decreetal amount.
That the cheque is in favour of Laxmi Narain i.e. complainant
(3)
no.2 and not in favour of complainant no.1 (though as per accused,
complainant no.2 dishonestly inserted his name as a payee).
That the cheque in question got dishonoured for the reason
(4)
“Stop Payment Instruction” by the accused.
(5) That the accused received demand notice from complainant
no.2.
(6) No payment was made by accused within stipulated time after
receipt of demand notice.
4. Having noted the undisputed facts as above, the Trial Court
recorded that only question that was to be decided was whether there
was a legally enforceable debt/liability in favour of the complainant
No. 2 Laxmi Narain and against the accused.
5. It was argued there that the respondent/accused had no legally
enforceable debt/liability towards the complainant No. 2 Laxmi Narain
Crl.L.Ps. 371-374/2011 Page 4 of 9
against the cheques in question as the latter had dishonestly entered his
name as payee on the cheques and that liability, if any, of
respondent/accused was towards complainant No. 1 i.e. Ghisa Ram. It
was also argued by the counsel for the respondent/accused that the
complainant No. 2 Laxmi Narain could not be said to be “holder” of
the cheque so as to raise presumption of legally enforceable debt
against him under Section 139 of the Act. It was also argued that in
any case, the liability has ceased to exist subsequent to the order dated
23.8.2008 of Appellate Court whereby the decree in favour of the
complainant No. 1 Ghisa Ram has been set aside and matter has been
remanded back to Trial Court.
6. On the other hand, submissions of learned counsel for the
complainants were that on the date of issue of cheques, the decree
dated 12.8.2005 was in force and therefore, subsequent setting aside of
same would not help the case of the respondent/accused. It was also
submitted that since Laxmi narain, complainant No. 2 was attorney of
Ghisa Ram, complainant No.1, therefore, it cannot be said that there
was no legally enforceable debt or liability of the respondent/accused
towards Laxmi Narain, complainant No. 2.
7. The learned Trial Court held that under Section 139 of the Act,
the presumption was available in favour of the “holder” of the cheques
and since complainant No. 2 Laxmi Narain was not a “holder” within
the ambit of the Section 8 of the Act, the presumption that the cheques
were given to him in discharge of debt/liability was not available to
him under Section 139 of the Act. The complainant Laxmi Narain was
also held to be not „holder‟ of the cheques in his own name inasmuch
Crl.L.Ps. 371-374/2011 Page 5 of 9
as firstly because, the authenticity of the copy of General Power of
Attorney in his favour was not proved and secondly because, in any
case, he was nowhere authorized or entitled to the possession of the
cheques in his name towards satisfaction of the decretal amount and to
recover or receive the amount in his own name. There being no
evidence led by him to prove the Power of Attorney or to show that he
was authorized to the possession of the cheques in his own name or
entitled to have or receive in his own name and even there being no
evidence of complainant No. 1 Ghisa Ram in this regard, he could not
be said to be in possession of the cheques as a holder of the cheques or
that the cheques were given to him towards the legally enforceable
debt or liability. On all these grounds, the complaints were dismissed
and the respondent/accused was acquitted in all the four cases.
8. The impugned judgment has been assailed on the same ground
as were taken by the complainant before the Trial Court. Admittedly,
the civil suit against the respondent was filed by Ghisa Ram,
complainant No. 1 alone and the decree was also passed in his name.
It was only at the time of execution of the decree that Power of
Attorney was purported to executed by him in favour of the
complainant No. 2 Laxmi Narain. The original of the said Power of
Attorney was never produced before the Trial Court.
9. Section 8 of the Negotiable Instruments Act defines the “holder”
as under:
‘8. " Holder". The" holder" of a promissory note, bill of exchange or
cheque means any person entitled in his own name to the possession
thereof and to receive or recover the amount due thereon from the
parties thereto. Where the note, bill or cheque is lost or destroyed, its
holder is the person so entitled at the time of such loss or
destruction’.
Crl.L.Ps. 371-374/2011 Page 6 of 9
10. In the case of Gemini versus Chandran, Crl. A. No. 282 of
1999 decided on 14.7.2006, Kerala High Court interpreted Section
8 of Negotiable Instruments Act as follows:
“23. I shall first consider who a "holder" of the cheque is. The
definition reveals, he is not a person who merely "holds" or
"carries" the cheque, as it may apparently appear. The 'holder' is
not the person who is in mere possession of the cheque. He is not
the one who merely "produces" the cheque in court from his
custody. He is not even the person who is only named in the
cheque. A "holder" of the cheque has a definite meaning under
the Act. Section 8 provides that a "holder" of the cheque is the
person who is `ENTITLED' in his own name to the possession
thereof and to receive or recover the amount due thereon from
the parties thereto. (Where the cheque is lost or destroyed, its
holder is the person so entitled at the time of such loss or
destruction).
24. The bedrock of the definition of holder is "entitlement". Such
entitlement is i) to the possession of the cheque and ii) to receive
and recover the amount due thereon from the parties to the
cheque. Strictly speaking, even the actual possession of the
cheque may not be decisive under section 8. Even if a person is
in possession of the cheque, if he does not have the entitlement as
stated in the section, such person cannot be said to be a
"holder". So also, even if a person is not in actual possession of
the cheque, if he is `entitled' to be in possession of the cheque, he
can still be brought under the definition of the "holder". It is not
even the physical possession of the cheque, but the
`ENTITLEMENT' to be in possession of the cheque which is
relevant.
25. …….
26. It is also relevant to note that the "holder's" entitlement to
possession of the cheque and to the recovery or receipt of the
amount etc., must be "IN HIS OWN NAME". That means, even if
a person has certain right to possess the cheque and to receive
or recover the amount etc., such mere right may not suffice to
bring him within the sweep of section 8 of the Act, unless such
entitlement is "in his own name" and not in any other person's
Crl.L.Ps. 371-374/2011 Page 7 of 9
name. That means any and every entitlement is not enough, but it
must be entitlement in his own name”.
11. The presumption regarding the cheques having been given in
discharge of any debt or other liability under Section 139 of the Act
was not to be available to the complainant Laxmi Narain inasmuch as
such a presumption was only available to the holder of a cheque. Since
he was not the holder of the cheque as discussed above, such a
presumption was not available to him. Even otherwise, he was not
entitled to have or receive cheques in his own name since the decree
was in favour of complainant No. 1 Ghisa Ram and he was never
authorized by the aforesaid Power of Attorney or otherwise to receive
the possession of the cheques in his name from the accused. In any
case, the decree holder Ghisa Ram nowhere authorized the
complainant No. 2 Laxmi Narain to receive the cheques or recover the
amounts in his name. In the given facts and circumstances, Laxmi
Narain could only be said to be a carrier or possessor of cheques in
trust of Ghisa Ram. He was not entitled to receive, have or possess the
cheques in his own name and to recover the amounts due to Ghisa Ram
from the accused. It was not the case of the complainant Laxmi Narain
that the cheques were given to him towards any legally enforceable
debt or liability due to him from the accused. It was also not the case
of the complainant Laxmi Narain that the actionable claim of recovery
against the accused was transferred in his name by Ghisa Ram.
12. The other pertinent aspect of the case which demolishes the
present petitions is that these have been filed by Laxmi Narain as
attorney of the deceased Ghisa Ram. With the death of the Ghisa Ram,
Crl.L.Ps. 371-374/2011 Page 8 of 9
the attorney, if any, executed by him in favour of Laxmi Narain would
come to an end being non est and non-enforceable and on this ground
also, the petitions are not maintainable.
13. In view of my above discussion, I do not see any infirmity or
illegality in the impugned judgments of learned M.M. The leave
petitions merit dismissal and are accordingly dismissed in limini.
M.L. MEHTA,J
JANUARY 04, 2012
akb
Crl.L.Ps. 371-374/2011 Page 9 of 9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 04.01.2012
+ CRL.L.P. 371/2011
GHISA RAM (DECEASED) THROUGH: SH. LAXMI
NARAIN ..... Petitioner
Through: Mr.Sanjay Sharma, Advocate.
versus
SHAILENDER KUMAR SHARMA
..... Respondent
Through:
With
CRL.L.P. 372/2011
GHISA RAM DECD. THR. LAXMI NARAYAN
..... Petitioner
Through: Mr.Sanjay Sharma, Advocate.
versus
SAHILENDER KUMAR SHARMA
..... Respondent
Through:
With
CRL.L.P. 373/2011
GHISA RAM DECD. THR. LAXMI NARAIN ..... Petitioner
Through: Mr.Sanjay Sharma, Advocate.
versus
SHAILENDER KUMAR SHARMA
Crl.L.Ps. 371-374/2011 Page 1 of 9
..... Respondent
Through:
And
CRL.L.P. 374/2011
GHISA RAM DECD. THR. LAXMI NARAIN
..... Petitioner
Through: Mr.Sanjay Sharma, Advocate.
versus
SHAILENDER KUMAR SHARMA
..... Respondent
Through:
CORAM:
HON’BLE MR. JUSTICE M.L. MEHTA
M.L. MEHTA, J. (Oral)
+Crl.M.As. 10628/2011, 10722/2011, 10723/2011 & 10641/2011 (for
restoration)
Heard, in view of the reasons mentioned in the applications, the
applications are allowed and the leave petitions are restored to their
original numbers.
Applications stand disposed of.
Crl.L.Ps. 371-374/2011
1. These four leave petitions arise out of the separate judgments
th
dated 18 May, 2011 of the learned M.M. passed in four complaints
being CC Nos. 113/2011, 110/2011, 112/2011 & 111/2011 under
Section 138, Negotiable Instruments Act (hereinafter referred to as
Crl.L.Ps. 371-374/2011 Page 2 of 9
„Act‟). These petitions have been filed on behalf of Ghisa Ram
(deceased) through attorney Laxmi Narain against the impugned
judgments whereby the accused/respondent Shailender Kumar Sharma
was acquitted by the learned M.M. in all the four complaints under
Section 138 of the Act.
2. The aforesaid complaints were filed by Ghisa Ram and Laxmi
Narain as complainants No. 1 and 2. The material facts as gathered
from the record are that the complainant No. 1 in the complaint
namely Ghisa Ram had filed a civil suit against the accused/respondent
as well as one Om Prakash for possession, injunction and recovery of
damages. During the pendency of the said suit, complainant No. 1
Ghisa Ram executed a General Power of Attorney dated 3.7.2003 in
favour of the complainant No. 2 Laxmi Narain thereby authorizing him
to file and obtain the possession as well as the damages from the
opposite parties. The said suit came to be decreed vide order dated
12.8.2005 against accused Shailender Kumar Sharma, who was held
liable to pay to the complainant Ghisa Ram a sum of Rs. 5,06,600/-
along with damages, interest and cost. Thereafter, the complainant No.
2 Laxmi Narain acting as attorney of complainant No. 1 Ghisa Ram
filed an execution petition of the decree dated 12.8.2005. In execution
of the said decree, the goods of accused were seized from his shop No.
24, Babu Market, Sarojini Nagar, New Delhi. On the request made by
the accused, complainant No. 2 agreed to accept a sum of Rs. 3.50
lakhs towards full and final satisfaction of the decretal amount.
Consequently, accused/respondent paid a sum of Rs. 50,000/- in cash
and issued four cheques of Rs. 75000/- each in favour of the
Crl.L.Ps. 371-374/2011 Page 3 of 9
complainant No. 2, which on presentation, got dishonoured on account
of „Payment Stopped by Drawer”. Since the respondent/accused failed
to make payment after the statutory demand notice, the aforesaid four
complaints were filed under Section 138 of the Act. The plea taken by
the respondent/accused was that the blank cheques were obtained
under coercion and that subsequently, the name of the complainant
No.2 Laxmi Narain was filled. It was also his plea that a notice was
issued to Laxmi Narain not to present the said cheques.
3. The Trial Court found the following facts to be not disputed
between the parties:
(1) That there was a decree dated 12.8.2005 in favour of
complainant No.1 i.e. Ghisa Ram and against accused for possession
and recovery of amount of Rs.5,06,600/-.
(2) That the cheque in question bears the signatures of accused
and it was issued towards satisfaction of decreetal amount.
That the cheque is in favour of Laxmi Narain i.e. complainant
(3)
no.2 and not in favour of complainant no.1 (though as per accused,
complainant no.2 dishonestly inserted his name as a payee).
That the cheque in question got dishonoured for the reason
(4)
“Stop Payment Instruction” by the accused.
(5) That the accused received demand notice from complainant
no.2.
(6) No payment was made by accused within stipulated time after
receipt of demand notice.
4. Having noted the undisputed facts as above, the Trial Court
recorded that only question that was to be decided was whether there
was a legally enforceable debt/liability in favour of the complainant
No. 2 Laxmi Narain and against the accused.
5. It was argued there that the respondent/accused had no legally
enforceable debt/liability towards the complainant No. 2 Laxmi Narain
Crl.L.Ps. 371-374/2011 Page 4 of 9
against the cheques in question as the latter had dishonestly entered his
name as payee on the cheques and that liability, if any, of
respondent/accused was towards complainant No. 1 i.e. Ghisa Ram. It
was also argued by the counsel for the respondent/accused that the
complainant No. 2 Laxmi Narain could not be said to be “holder” of
the cheque so as to raise presumption of legally enforceable debt
against him under Section 139 of the Act. It was also argued that in
any case, the liability has ceased to exist subsequent to the order dated
23.8.2008 of Appellate Court whereby the decree in favour of the
complainant No. 1 Ghisa Ram has been set aside and matter has been
remanded back to Trial Court.
6. On the other hand, submissions of learned counsel for the
complainants were that on the date of issue of cheques, the decree
dated 12.8.2005 was in force and therefore, subsequent setting aside of
same would not help the case of the respondent/accused. It was also
submitted that since Laxmi narain, complainant No. 2 was attorney of
Ghisa Ram, complainant No.1, therefore, it cannot be said that there
was no legally enforceable debt or liability of the respondent/accused
towards Laxmi Narain, complainant No. 2.
7. The learned Trial Court held that under Section 139 of the Act,
the presumption was available in favour of the “holder” of the cheques
and since complainant No. 2 Laxmi Narain was not a “holder” within
the ambit of the Section 8 of the Act, the presumption that the cheques
were given to him in discharge of debt/liability was not available to
him under Section 139 of the Act. The complainant Laxmi Narain was
also held to be not „holder‟ of the cheques in his own name inasmuch
Crl.L.Ps. 371-374/2011 Page 5 of 9
as firstly because, the authenticity of the copy of General Power of
Attorney in his favour was not proved and secondly because, in any
case, he was nowhere authorized or entitled to the possession of the
cheques in his name towards satisfaction of the decretal amount and to
recover or receive the amount in his own name. There being no
evidence led by him to prove the Power of Attorney or to show that he
was authorized to the possession of the cheques in his own name or
entitled to have or receive in his own name and even there being no
evidence of complainant No. 1 Ghisa Ram in this regard, he could not
be said to be in possession of the cheques as a holder of the cheques or
that the cheques were given to him towards the legally enforceable
debt or liability. On all these grounds, the complaints were dismissed
and the respondent/accused was acquitted in all the four cases.
8. The impugned judgment has been assailed on the same ground
as were taken by the complainant before the Trial Court. Admittedly,
the civil suit against the respondent was filed by Ghisa Ram,
complainant No. 1 alone and the decree was also passed in his name.
It was only at the time of execution of the decree that Power of
Attorney was purported to executed by him in favour of the
complainant No. 2 Laxmi Narain. The original of the said Power of
Attorney was never produced before the Trial Court.
9. Section 8 of the Negotiable Instruments Act defines the “holder”
as under:
‘8. " Holder". The" holder" of a promissory note, bill of exchange or
cheque means any person entitled in his own name to the possession
thereof and to receive or recover the amount due thereon from the
parties thereto. Where the note, bill or cheque is lost or destroyed, its
holder is the person so entitled at the time of such loss or
destruction’.
Crl.L.Ps. 371-374/2011 Page 6 of 9
10. In the case of Gemini versus Chandran, Crl. A. No. 282 of
1999 decided on 14.7.2006, Kerala High Court interpreted Section
8 of Negotiable Instruments Act as follows:
“23. I shall first consider who a "holder" of the cheque is. The
definition reveals, he is not a person who merely "holds" or
"carries" the cheque, as it may apparently appear. The 'holder' is
not the person who is in mere possession of the cheque. He is not
the one who merely "produces" the cheque in court from his
custody. He is not even the person who is only named in the
cheque. A "holder" of the cheque has a definite meaning under
the Act. Section 8 provides that a "holder" of the cheque is the
person who is `ENTITLED' in his own name to the possession
thereof and to receive or recover the amount due thereon from
the parties thereto. (Where the cheque is lost or destroyed, its
holder is the person so entitled at the time of such loss or
destruction).
24. The bedrock of the definition of holder is "entitlement". Such
entitlement is i) to the possession of the cheque and ii) to receive
and recover the amount due thereon from the parties to the
cheque. Strictly speaking, even the actual possession of the
cheque may not be decisive under section 8. Even if a person is
in possession of the cheque, if he does not have the entitlement as
stated in the section, such person cannot be said to be a
"holder". So also, even if a person is not in actual possession of
the cheque, if he is `entitled' to be in possession of the cheque, he
can still be brought under the definition of the "holder". It is not
even the physical possession of the cheque, but the
`ENTITLEMENT' to be in possession of the cheque which is
relevant.
25. …….
26. It is also relevant to note that the "holder's" entitlement to
possession of the cheque and to the recovery or receipt of the
amount etc., must be "IN HIS OWN NAME". That means, even if
a person has certain right to possess the cheque and to receive
or recover the amount etc., such mere right may not suffice to
bring him within the sweep of section 8 of the Act, unless such
entitlement is "in his own name" and not in any other person's
Crl.L.Ps. 371-374/2011 Page 7 of 9
name. That means any and every entitlement is not enough, but it
must be entitlement in his own name”.
11. The presumption regarding the cheques having been given in
discharge of any debt or other liability under Section 139 of the Act
was not to be available to the complainant Laxmi Narain inasmuch as
such a presumption was only available to the holder of a cheque. Since
he was not the holder of the cheque as discussed above, such a
presumption was not available to him. Even otherwise, he was not
entitled to have or receive cheques in his own name since the decree
was in favour of complainant No. 1 Ghisa Ram and he was never
authorized by the aforesaid Power of Attorney or otherwise to receive
the possession of the cheques in his name from the accused. In any
case, the decree holder Ghisa Ram nowhere authorized the
complainant No. 2 Laxmi Narain to receive the cheques or recover the
amounts in his name. In the given facts and circumstances, Laxmi
Narain could only be said to be a carrier or possessor of cheques in
trust of Ghisa Ram. He was not entitled to receive, have or possess the
cheques in his own name and to recover the amounts due to Ghisa Ram
from the accused. It was not the case of the complainant Laxmi Narain
that the cheques were given to him towards any legally enforceable
debt or liability due to him from the accused. It was also not the case
of the complainant Laxmi Narain that the actionable claim of recovery
against the accused was transferred in his name by Ghisa Ram.
12. The other pertinent aspect of the case which demolishes the
present petitions is that these have been filed by Laxmi Narain as
attorney of the deceased Ghisa Ram. With the death of the Ghisa Ram,
Crl.L.Ps. 371-374/2011 Page 8 of 9
the attorney, if any, executed by him in favour of Laxmi Narain would
come to an end being non est and non-enforceable and on this ground
also, the petitions are not maintainable.
13. In view of my above discussion, I do not see any infirmity or
illegality in the impugned judgments of learned M.M. The leave
petitions merit dismissal and are accordingly dismissed in limini.
M.L. MEHTA,J
JANUARY 04, 2012
akb
Crl.L.Ps. 371-374/2011 Page 9 of 9