Delhi District Court
M/S Solitaire Logistic Pvt Ltd vs Harjog Overseas on 28 August, 2024
CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS
IN THE COURT OF MS. NEHA SHARMA,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT) DIGITAL COURT-02,
SOUTH-EAST DISTRICT, SAKET COURT COMPLEX, NEW DELHI
CRIMINAL COMPLAINT NO: 256/2022
M/S SOLITAIRE LOGISTIC PVT. LTD ............COMPLAINANT
VERSUS
HARJOG OVERSEAS ............ACCUSED
1. Name & address of the complainant: M/s Solitaire Logistic Pvt. Ltd.
through its Authorized
Representative Mr. Sunil Thakur
Registered office at E-22,
Panchsheel Park, New Delhi-
110017,
Corporate office at:- 309,
Skipper House (Terrace), 62 &
673, Nehru Place, New Delhi-
110019
2. Name & address of the accused : Harjog Overseas
through its proprietor
Sh. Dhanraj S. Sodhi,
R/o 261, Forest Lane, Sainik
Farms (Neb Sarai), New Delhi-
Digitally signed
NEHA by NEHA
SHARMA
SHARMA Date: 2024.08.28
19:17:39 +0545
Page no. 1 of 26 (Neha Sharma)
JMFC NI Act (DC-02) (SED)Saket/New Delhi
CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS
110068
3. Offence complained of : U/S 138, The Negotiable
Instruments Act,1881.
4. Plea of accused : Pleaded not guilty.
5. Date of Institution of case : 05.01.2022
6. Date of Final Arguments : 22.08.2024
7. Date of decision of the case : 28.08.2024
8. Decision : Convicted
JUDGMENT
1. Vide this judgment, this court shall dispose of the aforementioned complaint case filed by the complainant, M/s Solitaire Logistic Pvt. Ltd. through its AR Sh. Sunil Thakur (hereinafter referred to as the 'complainant') against accused Harjog Overseas through its Proprietor Sh. Dhanraj S. Sodhi (hereinafter referred to as the 'accused') under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act').
CASE OF THE COMPLAINANT
2. The complainant's case is that the complainant is engaged in business of freight forwarding, logistics and transportation. The accused i.e. Harjog Overseas is a proprietorship firm and the proprietor of the accused i.e. Mr. Dhanraj S Sodhi approached the complainant and requested for availing the services and inter-alia, representing that the accused shall be making timely payments towards the service rendered. The complainant provided logistic services without any kind of disruption Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:17:46 +0545 Page no. 2 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS and to the satisfaction of the accused and raised several invoices from time to time amounting to Rs. 56,66,893/-. Out of the total amount due to the complainant, a balance of Rs. 56,02,830/- was pending as per the accounts of the complainant. The copy of the ledger as on 10.10.2018 was shared with the accused on 26.09.2019, which was duly confirmed by the accused on 29.09.2019. The complainant requested the accused to clear the aforesaid outstanding amounts due to the complainant.
3. In discharge of his liability towards the complainant, the accused had issued three post-dated cheques bearing no. 001263, 001264 and 001265, all dated 22.09.2021 of Rs. 3,00,000/- each, all drawn on HDFC Bank, Saket Branch, New Delhi (hereinafter referred to as the 'cheques in question') in favor of the complainant but when the said cheques were presented by the complainant, the same were dishonoured for the reason "account blocked(situation covered in 21-25)" vide return memos dated 09.11.2021. Thereafter, the complainant sent a legal demand notice dated 27.11.2021 U/S 138 of the NI Act asking the accused to make the payment of the cheque amount, which was duly served upon the accused, however, the accused failed to make the payment despite delivery of the said legal demand notice. Hence, being aggrieved, the complainant has filed the present complaint and prayed that the accused be summoned, tried and punished under Section 138 of the NI Act.
SUMMONING OF ACCUSED
4. After hearing the arguments at the stage of pre-summoning, the accused was summoned vide order dated 08.03.2022, the accused entered appearance in the present case on 23.09.2022 and on the same day, he was admitted to bail.
NOTICE
5. The court framed notice of accusation under Section 251 of the Criminal Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:17:51 +0545 Page no. 3 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS Procedure Code, 1973 (hereinafter referred to as 'Cr.P.C.') against the accused on 29.11.2022. The substance of accusation was read over and explained to the accused and after being satisfied that the accused comprehended the same, the court recorded his plea. The accused pleaded not guilty and claimed trial. The accused admitted his signatures on the cheque in question and filling all particulars in the cheque in question except date. Upon being questioned regarding the address mentioned on the legal demand notice and receiving the said legal demand notice at the same address, he admitted the address mentioned on the legal demand notice to be his correct address and admitted receiving the legal demand notice on the said address.
6. In his plea of defence, the accused stated that he is a garment exporter and complainant company was providing him logistic services for approximately last 7-8 years. He stated that after few years the complainant company developed a friendly relationship with him and started doing several other businesses in joint venture with him such as sale purchase of land, gems jewelry and exports. Since the value of articles was high, the complainant demanded cheques in question as security from him apart from the original title deed of his house located at Sainik Farm. He stated that the complainant also got one Mercedes Car having value of approximately Rs. 68 Lakhs purchased in his name and undertook to make payment of Rs. 1 lakh per month as its rent for using said car but they used the said car for two years but did not make payment of any amount and returned the vehicle in a very bad condition for which he had to spend lakhs of Rupees for its repair before its resale. He denied any liability towards the complainant.
7. On the same date, the statement of admission and denial was also recorded U/S 294 Cr.P.C. wherein the accused admitted the correctness and genuineness of return memo and postal receipts, pursuant to which Bank Witness at Sr. No. 2 of list of witness was dropped. The matter was, thereafter, listed for the Digitally signed NEHA by NEHA SHARMA SHARMA Date: 2024.08.28 19:17:54 +0545 Page no. 4 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS evidence of the complainant.
EVIDENCE OF THE COMPLAINANT
8. To prove his case prima facie, the AR of the complainant company has filed his affidavit of evidence under Section 200 of the Cr.P.C. by way of an affidavit i.e. Ex. CW-1/A wherein he has reiterated the averments made in the complaint. He placed reliance upon the following documents:
EX. CW1/1 Copy of Board Resolution dated 01.12.2021 (OSR). EX. CW1/2 (colly) Copy of the Invoices raised from time to time to accused (OSR). EX. CW1/3 is the copy of the ledger of the complainant showing the outstanding (OSR).
EX. CW1/4 (colly) is the copy of the trial mail dated 26.09.2019 and 29.09.2019 EX. CW1/5 (Colly) are original cheques bearing No. 001263, 001264 and 001265, all dated 22.09.2021 of Rs. 3,00,000/- each.
Ex. CW1/6 (colly) is the original return memos dated 09.11.2021. Ex.CW1/7 (colly) is copy of the legal demand notice dated 27.11.2021, along with its postal receipts and tracking report.
EX. CW1/8 is the reply filed by the accused to the legal demand notice. EX. CW1/9 is the copy of the Board Resolution Dated 05.05.2023 (OSR). EX. CW1/10 (colly) are the copies of e mail/ trial mail with the ledger. EX. CW1/11 is the copy of email dated 29.09.2019.
EX. CW1/12 is the certificate U/S 65 B of Indian Evidence Act regarding trial e mail dated 26.0-9.2019 to 20.03.2017 and e-mail dated 29.09.2019. (objected by Ld. Counsel for accused to the mode of proof as this certificate was not filed earlier) Ex. CW1/13 is the certificate U/S 65 B of Indian Evidence Act along with this complaint. Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:17:58 +0545 Page no. 5 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS
9. CW-1 was cross examined by Ld. counsel for accused. Vide separate statement of AR of the complainant recorded on 28.11.2023, CE was closed.
EXAMINATION OF THE ACCUSED UNDER SECTION 313 CR.P.C.
10. The accused was examined under Section 313 Cr.P.C. on 13.12.2023 wherein the accused admitted taking logistic services from the complainant but stated that invoices amounting to approximately Rs. 13,60,000/- were raised by the complainant for the accused's firm. He stated that he does not remember if the complainant had shared the copy of ledger as on 10.10.2018 with him on 26.09.2019 which was duly confirmed by him on 29.09.2019, however, he stated that during business transactions with Mr. Gagandeep Singh Jolly, Director of complainant company, they developed personal relations with each other. The accused got involved in property dealing, jewellery and gems business of Mr. Gagandeep Singh Jolly at his behest. The accused received Rs. 1 crore from him against which he had to execute an agreement to sell as security for his house situated in Sainik Farms which is worth Rs. 10 crores.
11. He further stated that he was emotionally manipulated by Mr. Gagandeep Singh Jolly and he had issued 20 blank security cheques including the cheques in question to Mr. Gagandeep Singh Jolly. He had also given one brand new Mercedeze car of Rs. 68 lakhs to Mr. Gagandeep Singh Jolly but he did not pay the lease amount of Rs. 1 lakh per month to the accused. The accused had also given Rs. 1 lakh salary to the wife of Mr. Gagandeep Singh Jolly at request of Mr. Gagandeep Singh Jolly. He stated that he was called by Mr. Jolly to his house in Panchseel Park and he was forced to fill the cheques in question with his signatures as well as the amount. Thereafter, the accused admitted his signatures on the cheques in question, filling all particulars except date in the cheques in question, receiving the legal Digitally signed NEHA by NEHA SHARMA SHARMA Date: 2024.08.28 19:18:02 +0545 Page no. 6 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS demand notice but denied his liability towards the complainant. Thereafter, since the accused expressed his willingness to lead DE, the matter was listed for defence evidence.
DEFENCE EVIDENCE
12. Pursuant thereto, the accused examined himself as DW-1 and Manager, HDFC Bank Branch Saket as DW-2. Both the witnesses were cross examined by Ld. Counsel for complainant. Thereafter, vide separate statement of accused recorded on 12.07.2024, defence evidence was closed and the matter was listed for final arguments.
FINAL ARGUMENTS
13. Both parties addressed their final arguments. Ld. counsel for the complainant, argued that the accused has admitted business relations with the complainant and issuance of cheques in question to the complainant. He further argued that the accused has admitted receiving services from the complainant but failed to prove that deficient services were provided by the complainant. He argued that Board of resolution authorizing the AR are Ex. CW1/1 and Ex. CW1/9. He further argued that accused has failed to rebut the presumption U/S 139 NI Act. Accordingly, Ld. counsel prayed that the accused be convicted for the offence under section 138 NI Act. Reliance is placed on judgments in Kalamani Tex & Anr. Vs. P. Balasubramanian: 2021 SCC Online SC 75, Basalingappa VS. Mudibasappa (2019) 5 SCC 418 (Para 25 and 26), Rajesh jain Vs. Ajay Singh (Supreme Court) SLP (Crl.) No. 12808 of 2022), Sankar Das Vs. Alak Dey and Ors. (30.06.2021-Tripura):
Manu/TR/0327/2021, Ashok Kumar Vs. Gulshan Kumar (11.09.2009-DELHC):
MANU/DE/2275/2009, Chikkayya Vs. Anandayya (09.04.2021-KARHC): MANU/KA/2066/2021, Badasha Dastagir Jamadar Vs. Abdul Imam Shekh Digitally signed NEHA by NEHA SHARMA SHARMA Date: 2024.08.28 19:18:06 +0545 Page no. 7 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS (05.07.2021-KARHC):MANU/KA/2884/2021, V. Guard Industries Ltd. Vs. Sreeanjana Enpterprises and Ors. (10.02.2020-KARHC): MANU/KA/1502/2020, Shree Gokulam Chit and Finance Co. (P) Ltd. Vs. State of Kerala and Ors. (09.10.2019-KERHC): MANU/KE/4087/2019, Liakat Ali Vs. The State (Govt. of NCT of Delhi) and Ors. (01.08.2011-DELHC): MANU/DE/3222/2011 and MMTC LTD. and Another Versus Medchl Chemicals and Pharma (P) Ltd. (2002) 1 Supreme Court Cases 234 (Para 11 and 12).
14. Per contra, Ld. counsel for the accused, argued that the accused owes no legal liability for payment of cheque amount to the complainant as cheques have been misused by the complainant. He further argued that complaint is defective as there is no authorization to file the complaint. He further argued that liability of the accused is only for Rs. 13,60,124/- and not of the amount of cheques in question. He further argued that salary was paid to the wife of Gagandeep Jolly and Mercedes Car was bought for Gagandeep Jolly in the name of the accused but they were not taken into account. Mr. Gagandeep Jolly did not even enter the witness box as a witness. He further submitted that the accused has rebutted the presumption raised U/S 139 NI Act but complainant failed to prove the guilt of the accused beyond reasonable doubt, hence, accused is entitled to be acquitted. He placed reliance upon judgments in Janki Vashdeo Bhojwani and Anr. Vs. Indusind Bank Ltd. and Ors. (2005(2) SCC 217) as quoted in AC Narayanan Vs. State of Maharashtra & Anr. (2014(11) SCC 790), Rangappa Vs. Sri Mohan, (2011(1) SCC (CRI) 184, Basalingappa Vs. Mudibasappa (2019(5) SCC 418), Kusum Ingots and Alloys Ltd. Vs. Pennar Peterson Securities Ltd. & Ors. (AIR 2000 SC 954) and A.C. Narayanan Vs. State of Maharashtra & Anr (2014 (11) SCC 790).
15. The file has been carefully and minutely perused and my issue-wise findings with reasons thereof are as under: - Digitally signed NEHA by NEHA SHARMA SHARMA Date: 2024.08.28 19:18:10 +0545 Page no. 8 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS FINDINGS
16. Before appreciating the facts of the case and evidences led by the both the sides for the purpose of decision, let us first discuss the relevant position of law which is embodied in section 138 of NI Act. In the case of Kusum Ingots and Alloys Ltd. vs. Pennar Peterson Securities Ltd. (2000) 2 SCC 745, the apex court has expounded the ingredients which are required to be fulfilled in order to constitute an offence under Section 138 of the NI Act. The relevant portion of the said judgment laying down the ingredients to be satisfied for making out a case under Section 138 of the NI Act is reproduced as under:
a) A person must have drawn a cheque on an account maintained by him in a bank for payment of a certain sum of money to another person from out of that account for the discharge of any legally enforceable debt or liability;
b) cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier;
c) That cheque has been returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
d) The payee or the holder in due course of the cheque has made a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
e) The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
17. Being cumulative, it goes without saying that it is only when all the Digitally signed NEHA by NEHA SHARMA SHARMA Date: 2024.08.28 19:18:14 +0545 Page no. 9 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act. Having said that, it becomes imperative to mention section 139 of NI Act which carves out a presumption in favour of the drawee that the cheque was issued to him in discharge of a debt or other liability of a legally enforceable nature. Also, the said provision must be read along with the section 118 of the same enactment which spells out another presumption in favour of the drawee that every negotiable instrument was drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.
18. Having said that, what follows from the above is that the web of proof in a trial under section 138 NI Act is structured on the premise of the reverse onus of proof theory since the offence is a document based technical one. The journey of evidence in a trial under section 138 NI Act thus, begins not from the home of the prosecution story but from the point of the defence. The presumptions carved out in favour of the complainant are those of law and not those of fact. The court is obligated to draw presumptions and only when the contrary is proved by the defence, the same will be said to be rebutted. Whereas the standard of proof remains the same in such a trial, the reverse onus of proof on the defence is guided by the principle of preponderance of probabilities only.
19. As rebuttal evidence, the accused merely has to prove that the cheque was not given for any consideration or that there was no legal liability in existence against him for which the negotiable instrument was given. In this regard, reliance can be placed on Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16 wherein it was held as under: Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:18:19 +0545 Page no. 10 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS "22. Because both Sections 138 and 139 require that the Court `shall presume' the liability of the drawer of the cheque for the amounts for which the cheque are drawn, ..., it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption has been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused (...). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court may presume a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable probability of the nonexistence of the presumed fact.
23. In other words, provided the facts required to form the basis of a presumption of law exists, the discretion is left with the Court to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man."
20. In the backdrop of the factual narrative of the case, following points of determination arises in the present case: Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:19:06 +0545 Page no. 11 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS A. Whether the complainant has been successful in raising the presumption under section 118 read with section 139 of the N.I Act, 1881? B. If yes, whether the accused has been successful in raising a probable defence to rebut the presumptions?
21. Since criminal liability can be attached by proving each element of the section under which liability is sought to be enforced, I shall now go on to appreciate the evidence- documentary and oral, in light of how compellingly it satisfies each of such ingredient, if at all.
22. The first condition pertains to the issuance of the cheque in question to make the payment from an account maintained by the drawer of the cheque towards a legally enforceable debt or other liability. The complainant has proved the original cheques dated 22.09.2021 and original return memos dated 09.11.2021 i.e. Ex. CW1/5 (colly) and Ex. CW1/6 (colly) respectively which the accused has not disputed as being drawn on the account of the accused. At the time of framing of Notice U/S 251 Cr.P.C., the accused admitted his signatures and filling all particulars except date in the cheques in question. Thus, the signatures upon the cheques in question and issuance of cheques in question to the complainant are admitted.
23. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act which lays down that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:19:10 +0545 Page no. 12 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS use the expression "shall", which makes it imperative for the court to raise the presumptions once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court in Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
24. Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 wherein it was held;
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in Digitally signed NEHA by NEHA SHARMA SHARMA Date: 2024.08.28 19:19:15 +0545 Page no. 13 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
25. Thus, the presumptions raised under Section 118(b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability. Now, coming to the facts of the present case, in the NOA U/S 251 Cr.P.C., the accused has taken plea of defence that he had given the cheques in question as security cheques to the complainant apart from the original title deed of his house located at Sainik Farms.
He further stated that complainant also got one Mercedes Car having value of approximately Rs. 68 Lakhs purchased in his name and undertook to make payment of Rs. 1 lakh per month as its rent for using the said car but the said car was used for two years but complainant did not make payment of any amount and returned the vehicle in a very bad condition for which he had to spend lakhs of Rupees for its repair before its resale.
26. Thus, the accused has admitted taking logistic services from the complainant. He further admitted issuing the cheques in question as security cheques to the complainant. Ld. Counsel for accused has argued that liability of the accused is only for Rs. 13,60,000/- and not of the amount of the cheques in question. During cross examination, when the AR of the complainant who stepped into the witness box as CW-1 was cross examined on this point, CW-1 stated that third party shipments were made at the insistence of the accused upon his assurance that accused shall make the payment. He further stated that the operation head Madan Singh had also assured the same vide email dated 25.10.2017 which is part of Ex. CW1/10. He Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:19:19 +0545 Page no. 14 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS further stated that shipments were done at the behest of the accused which is already Ex. CW1/10. The relevant portion of the cross examination of CW-1 is reproduced herein;
"At this stage, witness is shown Ex. CW1/10. Q. Is it correct that Ex. CWI/10 only reflects amount of Rs. 13,60,124/- to be outstanding against accused and other payments to be outstanding against other persons? Ans. Yes. (vol. We had made third party shipment at the insistence of the accused upon his assurance that he shall make the payment. The operation head namely Madan Singh had also assured the same vide email dated 25.10.2017 which is a part of Ex. CW1/10). Q. Do you have any consent letter from M/s Bhairo Exports, Bir Bros Exports, Zeb Designs, Seema Creations, Singh International or M/s Shivam Enterprises?
Ans. No we do not have any consent, however we did the shipment at the behest of the accused which is already Ex. CW1/10."
27. The invoices raised by complainant company and the ledger of the complainant showing the outstanding amount are Ex. CW1/2 and Ex. CW1/3 respectively. Even though, Ex. CW1/2 and Ex. CW1/3 have been disputed by the accused, the email dated 25.10.2017 which is Ex. CW1/10 is not denied by the accused. In the email dated 25.10.2017 sent by the accused, the accused has confirmed the balance of Rs. 53,81,610/- to be due. Vide email dated 29.09.2019, the accused has again confirmed the outstanding to the AR of the complainant and assured that post-dated cheques would be issued soon. The accused who stepped into the witness box as DW-1 admitted in his cross examination that vide email dated 29.09.2019 which is Ex. CW1/11, he had confirmed the outstanding as it was reflected in the ledger sent with the said email, however, he stated that outstanding was confirmed due to pressure put by Mr. Gagan Jolly, one of the directors of the Digitally signed NEHA by NEHA SHARMA SHARMA Date: 2024.08.28 19:19:24 +0545 Page no. 15 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS complainant company as the original title deeds of the house of the accused are with Mr. Gagan Jolly and his father. The relevant portion of cross examination of accused is reproduced herein;
"Q. Is it correct that you vide an email dated 29.09.2019 which is Ex. CW1/11, confirmed the outstanding as it was reflected in the ledger sent with the same email? Ans. Yes. I confirmed but it was confirmed due to pressure put by Mr. Gagan Jolly, director of the complainant company that if I will not agree then he will sell my house whose original title deed is with Mr. Gagandeep Jolly and his father Mr. Sardul Singh Jolly. It is wrong to suggest that I confirmed the ledger because of any pressure by either Gagan Singh Jolly and Sardul Singh Jolly and I am deposing falsely. It is wrong to suggest that I confirmed the ledger because the said outstanding was due for the shipments sent on my behalf.
At this stage, witness is shown Ex. CW1/2. Q. Can you point out which shipment sent through the said invoice had any alleged delay as stated in your reply to the legal notice?
Ans. I cannot point out from the invoices as it is many years old invoices.
...
At this stage, witness is shown Ex. CW1/10 (colly.) (email dated 28.08.2017) Q. Did you sent any objection to the said email as the email reflected your outstanding for the shipments sent under the following names: Harjog Overseas, Bhairo Exports, Bir Bros Exports, Zeb Designs, Seema Creations, Singh International and Shivam Enterprises? Ans. Yes. I had objected telephonically to Mr. Gagandeep Singh Jolly but I did not send any email for the same.
Court question: Is it correct that you did not send any objection in writing? Digitally signed by Ans. Yes. NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:19:27 +0545 Page no. 16 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS It is wrong to suggest that I did not raise any objection telephonically. It is wrong to suggest that I never raised any objection either in writing or telephonically since all these transactions were happening on my behalf and was responsible to make the payment. It is wrong to suggest that all the transactions were also confirmed by Mr. Madan Singh vide email dated 25.10.2017. It is wrong to suggest that all the shipments as mentioned in the invoice Ex. CW1/2 were sent on my behalf and it was my legal liability to clear the said invoices. It is wrong to suggest that the cheques were issued for discharge of legal liability to the tune of Rs. 56,02,830/-. It is wrong to suggest that I issued the cheques voluntarily. It is wrong to suggest that I took false plea of deficiency in service in the reply to the legal notice. It is wrong to suggest that I took a false plea that the shipments were of other exporters introduced by me and I was not a guarantor for payment of such shipments. It is wrong to suggest that there was no threat extended to me by either Mr. Gagan Jolly or SS Jolly. It is wrong to suggest that the cheques in question were issued for discharge of my legal liability for the services that I have taken from the complainant. It is wrong to suggest that I am deposing falsely."
28. Thus, admittedly, the accused had confirmed the outstanding as it was reflecting in the ledger sent with the said email dated 29.09.2019 which is Ex. CW1/11, however, he stated that outstanding was confirmed due to pressure put by Mr. Gagan Jolly, one of the directors of the complainant company as the original title deeds of the house of the accused are with Mr. Gagan Jolly and his father. Any reasonable person would make every effort in his power and control to prevent the misuse of cheques given under coercion, however, there is nothing on record to show that any kind of coercion or pressure was put by Mr. Gagan Jolly upon the accused except for the bald allegations of the accused.
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2024.08.28
19:19:31
+0545
Page no. 17 of 26 (Neha Sharma)
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CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS
29. For the sake of argument, if one were to assume that the cheques in question were in fact, given under duress by the accused, then two pertinent questions may take birth out of reasonability- firstly, why did the accused not send a written notice to the complainant to demand the cheques back if there was no liability of the accused for the amount of the cheques in question in the first place. Secondly, why did the accused not file any complaint either with his bank or with the police immediately in order to ensure that the cheques were not misused. The particulars in the cheques in question except date have admittedly been filled by the accused himself. Moreover, the cheques in question were returned unpaid for reason "account blocked(situation covered in 21-25)" and not payment stopped by drawer.
30. If cheque is issued under duress, a reasonable person would atleast file a complaint with the bank or police to prevent misuse of cheque but the failure to lodge/file any complaint, further causes dubiety to lurk around the story of the defence. An adverse inference can safely be drawn against the accused who has otherwise failed to adduce any evidence to show that he indeed did everything within his power and control, as a prudent person would do, to ensure that the cheques tendered by him were not misused. Failure of the accused to prevent such alleged misuse renders the defence evidence weak. Reliance can be placed on the judgment pronounced by the Hon'ble Delhi High Court in V.S. Yadav v. Reena, CRL. A. NO. 1136 Of 2010 wherein it was held that:
"Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised under Section 139 of N.I. Act. If mere statement under Section 313 Cr. P.C. or under Section 281 Cr. P.C. of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant/ prosecution, then every accused has to be acquitted. But, it is not the law. In order to rebut the presumption under Section 139 of N.I. Digitally signed by NEHA NEHA SHARMA SHARMA Date: 2024.08.28 19:19:35 +0545 Page no. 18 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman/prudent person entering into a contract he could not have rebutted the presumption u/s 139 N.I. Act. If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case."
31. Further, for the sake of argument, even if the version of the accused that cheques in question were issued as security cheques is taken to be true, the said fact cannot extend any help to accused in the present case. The Hon'ble Supreme Court has held in Sripati Singh v. State of Jharkhand and Anr. 2021 SCC OnLine SC 1002.
"16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow." Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:19:39 +0545 Page no. 19 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS
32. Thus, financial transaction with the complainant is not denied. The accused has admitted his liability in email dated 29.09.2019 which is Ex. CW1/11 and he has also admitted issuance of cheques in question with all particulars filled except date. The factum of issuance of cheques as security would be of no assistance to the accused as the cheques which were issued as security would mature for presentation and the complainant was entitled to present the same. Further, the accused has claimed to have received the legal demand notice and the reply to the said legal demand notice is Ex. CW1/8. In Ex. CW1/8, it is admitted that services of the complainant were availed by the accused from time to time, however, it is stated that in the last few shipments, the accused faced some serious issues.
33. In paragraph no. 6 of Ex. CW1/8 i.e. reply to the legal notice, it is stated that the services provided by the complainant were neither satisfactory nor up to the mark and complete mismatch to the prevailing business standards, and there were inordinate delays in the shipment sent through the complainant due to which the accused had to bear unnecessary embarrassment and ultimately resulted in immense loss of business and hefty amount of losses in these consignment. However, when this was put to the accused in his cross examination, the accused could not disclose the details of shipments in which he faced serious issues. He further admitted that he did not write any email to the complainant informing about the delay in shipment but he stated that his employee Mr. Madan Singh had sent an email to the complainant informing about the delay in shipment to which the complainant had also replied but no such email was produced by the accused.
34. The accused further stated that he does not know if any client wrote an email regarding inordinate delay in shipments which are subject matter of the Digitally signed NEHA by NEHA SHARMA SHARMA Date: 2024.08.28 19:19:43 +0545 Page no. 20 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS complaint. He voluntarily stated that there must be an email and he need to trace the same, however, no such email was placed on record. He further admitted that no debit note was issued to the complainant against the shipments which were delayed. The relevant portion of cross examination of the accused is reproduced herein;
"At this stage, witness is confronted with para 3 of the reply to the legal notice from point X to X1 and Para 6 from point Y to Y1.
Q. Can you point out in which shipments you faced any serious issues claimed in para 3 of the reply to the legal notice from point X to XI only?
Ans. I do not remember the exact details of the shipments.
Q. Did you ever write any email to the complainant pointing out any issue with any shipment? Ans. I did not write any email but my staff Mr. Madan Singh had written an email to the complainant informing regarding the delay in the shipment to which the complainant had also replied.
It is wrong to suggest that there was no such delay happened in the shipments which are the subject matter of this complaint and I am deposing falsely w.r.t. the above said fact.
Q. Did any of your client wrote an email in writing that the shipments which are the subject matter of these complaints had any inordinate delay?
Ans. I do not know. (vol. There must have been an email but I need to trace the same).
It is wrong to suggest that there was no such email sent by any of my client. It is wrong to suggest that there was no inordinate delay in the shipments which are the subject matter of this complaint and I am deposing falsely w.r.t. the above said fact.
It is wrong to suggest that I had taken a false plea in the reply to the legal notice regarding deficiency in service in the shipments sent by the complainant on my behalf and I am deposing falsely w.r.t. the said fact. Q. Have you ever issued any debit note to the complainant because of the alleged shipments that got Digitally signed by NEHA NEHA SHARMA SHARMA Date: 2024.08.28 19:19:48 +0545 Page no. 21 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS late?
Ans. I do not remember (vol. We had friendly relations which is why also debit note was not raised.) It is wrong to suggest that there was no such inordinate delay or deficiency in service in the shipments that were sent on behalf of the accused by the complainant which are the subject matter of the present complaint and as such there were no debit notes sent."
35. Thus, in his reply to the legal demand notice send by the complainant, the accused denied his liability for payment of Rs. 56,02,380/- to the complainant as he claimed that services provided by the complainant were neither satisfactory nor up to the mark and there were inordinate delays in the shipment sent through the complainant, however, he could not produce any documentary or oral evidence in support of this contention which further demolishes the defence of the accused.
36. Next contention of the accused is that he has denied his liability as salary of Rs. 7,20,000/- was paid to the wife of Gagandeep Jolly and Mercedes Car was bought for Gagandeep Jolly in the name of the accused but they were not taken into account. The accused placed on record the emails with the complainant which is Ex. DW1/A and Ex. DW1/B. The details of payments are Mark A and reply of accused to not present the cheque without permission is Ex. DW1/C. He further examined Manager, HDFC Bank, as DW-2 in order to prove these transactions. DW-2 produced the bank account statement of respect of bank accounts of the accused which are Ex. DW2/A and Ex. DW2/B.
37. It is not denied that salary was paid to the wife of Mr. Gagandeep Jolly, one of the director of complainant company and Mercedes Car was bought for Mr. Gagandeep Jolly, one of the director of complainant company. Thus, admittedly, neither salary nor the Mercedes car was for the complainant company. It is settled that a director and a company are separate entities and there is nothing on record to Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:19:52 +0545 Page no. 22 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS show any indemnity/guarantee to have been given by the complainant company. Thus, the plea cannot be taken against the complainant company and same stands rejected.
38. During final arguments, Ld. Counsel for accused had argued that the legal demand notice which was admittedly issued by the AR of the complainant company, was issued without any authorization and Ex. CW1/1 and Ex. CW1/9 have not been proved by the complainant. Per contra, Ld. Counsel for complainant has argued that even presuming, that initially there was no authority, still the company can, at any stage, rectify that defect. He has placed reliance upon judgment in MMTC Ltd. (supra).
39. The legal demand notice i.e. Ex. CW1/7 bears the signature of the Ld. Counsel for complainant, thus, it cannot be said that legal demand notice was sent without any authority. In respect of the legal demand notice, the concerned counsel was authorized to send the same. Furthermore, the copy of board resolution dated 05.05.2023 i.e. Ex. CW1/9 (OSR) authorizes the AR Mr. Sunil Thakur to sign the letter, legal notices and replies thereto and it further authorizes the AR to institute and defend legal proceedings, civil or criminal for and on behalf of the company. Thus, even if it is presumed that at the time when legal demand notice was sent, there was no authorization in favour of AR of the complainant company, the defect was subsequently rectified. The judgment in Janki Vashdeo (supra) is distinguishable on facts.
40. Next, the Ld. Counsel has argued that original minutes of meeting were not produced, consequently, Ex. CW1/1 and Ex. CW1/9 have not been proved. The board of resolution in favour of the AR of the complainant Mr. Sunil Thakur as a proof of authorisation is Ex. CW1/1 and Ex. CW1/9. The CW-1 had also brought the Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2024.08.28 19:19:56 +0545 Page no. 23 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS minutes book on 28.11.2023 and photocopy of the minutes of meeting dated 01.12.2021 and 05.05.2023 were marked as Mark CW1/X1. It is settled law that there is presumption in respect of minutes and the minutes are presumed to be true and onus lies heavily on the party asserting that they are not correct. I am supported by judgment in M/S. Shradha Shipping Co. Pvt. Ltd. Vs. M/S. Adhithri Trading Company, 2015 CRLJ(NOC)483 BOM. In the present case admittedly, copy of the minutes of the meeting dated 01.12.2021 and 05.05.2023 were produced on record.
Hence, the said Power of Attorney was sufficient to authorise Sh. Sunil Thakur to institute the complaint and to depose on behalf of the complainant.
41. It is not the case of the accused that the AR of the complainant is not aware of the facts of the case or he is not closely connected with the affairs of the company. In fact, the AR of the complainant in the present case has only dealt with the accused in respect of the transactions in question. Thus, it cannot be said that AR of the complainant Mr. Sunil Thakur has filed the present case without any authorisation. Besides, the case has been filed in the name of the company and not in the name of the AR, thus, the argument that the AR Sunil Thakur has filed the complaint in his own name as he has signed at pt.
"A" in Ex. CW1/X2 is without any substance and reliance placed on judgment in A.C. Narayanan (supra) is misplaced. In the considered opinion of this court, the said argument is unmeritorious and same stands rejected. Since, in the present case all the defences taken by the accused stand beseeched, therefore, considering the weight of the attending circumstances viz, the consistency in the prosecution story, the compelling documentary evidence adduced by the complainant, the first element of section 138 NI Act stands assembled.
42. As far as the second condition is concerned, the same is satisfied upon the perusal of the cheques in question i.e. Ex. CW1/5 (colly) dated 22.09.2021 and Digitally signed by NEHA NEHA SHARMA SHARMA Date: 2024.08.28 19:20:00 +0545 Page no. 24 of 26 (Neha Sharma) JMFC NI Act (DC-02) (SED)Saket/New Delhi CC NI ACT 256/2022 M/S SOLITAIRE LOGISTIC PVT. LTD. VS. HARJOG OVERSEAS the return memos i.e. Ex.CW1/6 (colly) which are dated 09.11.2021, thus, the cheques in question have been presented within prescribed period of limitation of three months. The accused did not adduce any evidence whatsoever to contradict the same. Thus, this element of Section 138 NI Act stands proved. Coming to the third and fourth ingredient, the return memos i.e. Ex.CW1/6 (colly) show that cheques were dishonoured due to reason "account blocked(situation covered in 21-25)". This fact has not been disputed by the accused throughout the trial. Further, it has also been admitted by accused during his statement U/S 313 CrPC as well as during his statement of admission and denial recorded U/S 294 Cr. P.C. Such admission of the accused clearly shows that he issued cheques from the account in question intentionally despite being aware that the same will not be honoured.
43. Further, Section 146 of the NI Act, in this regard comes into play which raises a presumption that the court shall presume the fact of dishonor of the cheque in case the cheque is returned vide a return memo having thereon the official mark denoting that the cheque has been dishonoured. Such bank slip or memo is a prima facie proof of dishonor and the defence has failed to rebut the presumption U/S 146 of the NI Act. Since, receiving the legal demand notice is admitted by the accused, the third and fourth conditions also stand fulfilled.
44. The last condition is that the accused fails to make the payment within fifteen days from the date of the receipt of the legal demand notice. In the present case, the accused has admittedly failed to make the payment within fifteen days on the pretext that he has liability only for the dues of Harjog Overseas, one Mercedes car was bought for Mr. Gagandeep Jolly and salary was paid to the wife of Mr. Gagandeep Jolly. However, he has miserably failed to prove the said assertions. Thus, the last limb of what will entail the liability against the accused is also structured. Digitally signed by NEHA SHARMA NEHA Date:
SHARMA 2024.08.28
19:20:04
+0545
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DECISION
45. Since in the instant case, the accused has failed to lead any convincing evidence to aid him in discharge of his onus and the presumption of law operates in favour of existence of debt or liability. Thus, having considered the entire evidence, I am of the opinion that the complainant has successfully proved all the essential ingredients of Section 138 of the Act. Accordingly, this Court finds accused DHANRAJ S SODHI, PROPREITOR OF HARJOG OVERSEAS guilty and he is hereby convicted for the offence under section 138 of the NI Act. Let he be heard on the point of sentence separately.
46. Let the copy of this judgment be given to the convict free of cost and the same be also uploaded on CIS and Layers forthwith.
Digitally signedAnnounced in the open court on by NEHA
SHARMA
on this 28th August, 2024 NEHA Date:
SHARMA 2024.08.28
19:20:08
+0545
(NEHA SHARMA)
JUDICIAL MAGISTRATE FIRST CLASS
NI ACT (DIGITAL COURT-02)
SED/SAKET/28.08.2024
Note :-This judgment contains twenty six pages and all the pages have been checked and signed by me. Digitally signed by NEHA SHARMA NEHA Date:
SHARMA 2024.08.28
19:20:12
+0545
(NEHA SHARMA)
JUDICIAL MAGISTRATE FIRST CLASS
NI ACT (DIGITAL COURT-02)
SED/SAKET/28.08.2024
Digitally signed
NEHA by NEHA
SHARMA
SHARMA Date: 2024.08.28
19:20:15 +0545
Page no. 26 of 26 (Neha Sharma)
JMFC NI Act (DC-02) (SED)Saket/New Delhi