Delhi District Court
M/S Aruna Infracan P. Ltd. vs . Ravindra Cp Navelcar . Page No. I Of 24 . on 19 October, 2020
CC Na. 4954716 IN THE COURT OF Ms, TANVI KHURANA, METROPOLITAN MAGISTRATE- 04, NEW DELHI, PATIALA HOUSE COURTS, DELHI CC No. 49547/16 M/s Aruna Infracon Pvt. Ltd. F-5/9, Second Floor, Vasant Vihar New Delhi asenennararternenents Complainant ¥. Ravindra C.P Navelcar S/o Late Sh. Charadchandra Probo Navelkar. 628, Kadamba Depot Road, Alto Porvorim, Bardez, Goa. cuonounaneusensanensnennsens Accused JUDGMENT
(1) Serial number of the case: CC No. 49547 /16 (2) Name of the complainant: M/s Aruna Infracon Pvt. Ltd. (3) Name of the accused, & address: Ravindra C.P Navelcar S/o Late Sh. Charadchandra Prabo Navelkar, 628, Kadamba Depot Road, Alto Porvorim, Bardez, Goa.
(4) Offence complained of or proved: Section 138 Negotiable Instruments Act, 1881 (5} Plea of the accused : Pleaded not guilty {6} Final Order : Convicted (7) Date of Institution 10.05.2010 (8) Date of reserving : Nil (9) Date of Judgment 19.10.2020 M/s Aruna Infracan P. Ltd. Vs. Ravindra CP Navelcar . Page no. i of 24 .
oe (No, dUsa ele (As mandated us 355(1) of the Code of Criminal Procedure, 1973.) i. The jurisdiction of this Court is inveked by the complainant to pursue the prosecution against the complainant for dishonour of the cheques an the ground of "Funds Insufficient".
a Succinetly, it has been brought forth by the complainant that the accused had handed over the cheque bearing number 054795 dated 34.09.2009 for a sum of Rs. 5,00,00,000/- drawn on [CIC] Bank, Mapusa Branch, Goa (hereinafter referred as the "Cheque in question") in discharge of part of Habilities accrued on account of dues towards the complainant company pursuant to settlement arrived at in the mediation proceedings vide the agreement/ settlement dated 16.03.2009. The cheque in question was dishonoured on presentation vide return memo dated 10.03.2010 due to "Funds Insufficient'. Legal demand notice dated 23.03.2010 was issued and Reply dated 25.04.2010 denying the lability and stating that the agreement was procured by Mr. Satish Julka under coercion, undue influence and by misrepresentation of true facts was received. As payment was not received, hence, the complaint under Section 198 of Negotiable Instruments Act was filed.
3. The complainant led the pre-summoning evidence and the Authorized Representative tendered his affidavit, Ex. CWI1/1 and relied upon the following documents:
_ Nature of Document _ ee Board Resolution M/s Aruna infracon P. Ltd. Vs, Ravindra CP Nevelcar CC No. $954 896 Mark cw fe Agreement/S settiement _
- Return Memo dated 10. 03. 20 10 Reed, Demand Notice dated 23. 03. 2010 Sse After taking cognizance, the accused was summoned by the Ld. Predecessor vide order dated 12.07.2010. Pursuant to non bailable warrants, the accused appeared and was admitted to bail. Notice under $.251, Criminal Procedure Code, 1973 (hereinafter referred as "Cr.P.C.") was framed against the accused on 17.08.2011 wherein the accused pleaded not guilty. The application filed under Section 145 (2}, Negotiable Instruments Act, 1881 {hereinafter referred as "NL. Act") was allowed vide order of same date. The complainant/CW-1 was cross examined at length on several dates and thereafter the evidence of the complainant was closed, The statement of the accused under $.313/281 Criminal Procedure Code, 1973 was recorded and opportunity to lead evidence was granted. However, no defence evidence was led.
The Defence
5. As a plea of defence at the time of framing notice, the accused had mentioned that the cheque In question bore his signatures and it was he who had filled the other contents but it was taken from him by misrepresentation and coercion by the purported Directors of the Company namely Satish Julka, Amerdeep fulka, Ravi Arora and Baldev Arora. He denied having any liability towards the complainant company and alleged the case to he false.
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&. in the cross examination of CW-1, the Authorized representative of the complainant mentioned that the complainant company had only two M/s Aruna infracon P. itd. Vs. Ravindra CP Navetcar Page no. 3 of 24 CC No. 49547/16 directors-he and his brother. He admitted that extracts of minutes of meeting pertaining to beard resolution dated 19.09.2011 (Ex. CW1/B1) were signed only by one of the Director. He admitted that the cheque in question was issued by the accused in relation to a properly titled as "Tower Land" situated at Porvor Vasdeh, Goa, He mentioned that the Complainant company and M/s Anirea Developers Pvt. Ltd. are two different companies, both the companies had purchased properties from the accused separately and that he had invested his money in both the companies and was also the Additional IMrector of M/s Anirva Developers from September 2008 till December 2009.
He stated that he was the part of the talks at Mediation Centre in dual capacity-one being the investor and Director in M/s Anirva Developers and other being the Director of the Complainant Company. He mentioned that the agreement/settlement dated 16.03.2009 was executed and signed by the patties at his office in Vasant Vihar and that he had signed it being the Director of the complainant company. He mentioned that as the investments in both the companies were made through Sh. Satish Jhulka who knew the accused and was the common link hence, the composite agreement was signed by both the companies together. He mentioned that he had. transferred an amount of Five Crore Rupees in the account of the accused on different dates through RTGS on the advice of Satish Jhulka.
ve The witness filed Ex. CW1/D1- a document from the Bank certifying the transfer of amount from the account of the complainant to the account of the accused. The witness denied knowing Nageshwar Pandey directly. He mentioned that the complainant company had remitted an amount of Rs. 3,5 Crores on 07.08.2007 and Rs. 90,00,000/- on 10.08.2007 at the instance of Satish Julka. He mentioned that Satish Julka had told him that he had finalized a tower property in Goa and the accused had agreed to issue M/s Aruna infracon P. Ltd. Vs. Ravindra C.P Naveicar Page'no. 4 of 24 CC No, 49597776 a receipt and the scrutiny of the tide would be done ina fortnight which was the reason for remitting the amount of Rs. 4.4 Crores. He further mentioned that he had met the accused in July -September, 2007. He admitted that all the decisions pertaining to the tower property were taken by Satish Julka. He also mentioned that no agreement was entered towards the purchase of the tower property with the accused before remittance of the amount of Rs 5 Crores. He volunteered that the receipt was issued and agreements were to be signed in due course, a. The witness produced a photocopy of the receipt, Mark CW1/X. He mentioned that the receipt was signed on the same day when the funds were transferred. He admitted that he had not transferred any other amount besides Five Crore Rupees to the account of the accused. He also admitted that the subject matter of the agreement were Ravindra Land, Mahesh Land and Tower property. He mentioned that the Tower property had nothing to do with the Ravindra Land. He volunteered that the Tower property belonged to a church which was sold to him by misrepresentation that it belonged to the accused. He mentioned that the original receipt was misplaced maybe because of the raid by Income Tax Officials at his office in 2010. He stated that the accused admitted the receipt in the agreement dated 16.03.2009 on the basis of which the accused got interim bail from the Hon'ble High Court. The copy of order dated 09.07.2013 was Mark CW1/Y. He denied to the suggestion that the receipt was a fabricated document. He mentioned that he never got the actual possession of the Tower Property and the possession was given only on papers and the physical possession was with a Church. He mentioned that the property was situated on the left side after crossing the Panjim Bridge.
M/s Aruna Infracen P. Ltd, Vs. Ravindra CP Navelcar Page no. 5 of 24 CO No, 4954 2/16 a, He mentioned that the accused represented to Mr. Satish Jhulka that he had brought the Tower Property from the Church under some agreement to sell and he shall send the papers for due diligence within 15 days after receiving the amount of Rs. 5 Crores which were never produced and were sill awaited, He farther mentioned that he had visited the site in july, 2007 and the Ld. Counsel for the accused (Mr. Walwaiker), the accused anil Mr, Yashpal Raiker told him through Satish julka that the property in question was purchased by the accused from the Church and that the money was transferred on this representation. He also mentioned that since Satish julka had purchased another property for his Company from the accused, therefore there was no question of distrust towards the accused. He stated that only before filing income tax returns in March, 2008, he got suspicious as no supporting documents were filed and the land was verified and it was found that they had been cheated. He was questioned about the primary security of the agreement dated 16.03.2009 to which he responded that in real sense, the accused only misrepresented by giving the cheques of Rs. 35 Crores as collateral security because all the land mentioned in the settlement deed never belonged to him. He further explained that the Ravindra land that the accused had sold to M/s Anirva Developers was mortgaged with Goa Cooperative Bank and auction purchaser had already purchased it. Mahindra Land never belonged to him and Tower land belonged to some trust of the Church. According to him, there was no collateral security and the settlement agreement was signed so that the accused could get the interim bail from the Court which he did. He was asked that according to para 9 and 10 of the agreement, Ex. CW1/C, the complainant company had received complete rights to negotiate the sale deed/collaboration deed/ joint venture deed of Tower Property to secure Rs. 20 Crores with interest at the rate of 25%, so M/s Aruna Infracon P. Ltd. Vs. Ravindra C.P Navelcar | Page no. 6 of 24 -
CO No. 49549716 what steps were taken by the complainant company to discharge the obligation. The witness stated that as the Tower land never belonged to the accused, so he did net have any right to negotiate the deal with any third person, Ne mentioned that he was only under obligation to claim his money which he did alter giving one month's notice and then deposited the cheque as per the agreement. He also mentioned that there was no question of any negotiation with the Arch Diocese or any third person without seeing any title documents which they had not received till date. He denied that there were any reciprocal obligations casted by the agreement. He mentioned that the complainant cempany was to get only Ten Crore Rupees from the date of dishonouring of cheques alongwith the interest as was mentioned in the agreement and there was no further obligation. He mentioned that he had verified from the accused about the transaction before making the payment on phone and the accused thereafter gave him his account details. He stated that Satish Jhulka had the account details but then stated that he did not know whether he had if or not.
10. He mentioned that he had paid only Five Crore Rupees and rest of the Sixty- Five Lakh Rupees was paid by Sh. Satish Julka of which he did not know the mode of payment. He deposed that it was written in the agreement that the complainant has paid Rs. 5.65 Crores as Satish Julka had paid the amount of Sixty-Five Lakhs Rupees on the behalf of the company. He denied to the suggestions put by Ld. Counsel for the accused,
11. He denied to the several suggestions put by the Ld. Counsel for the accused pertaining to the contention that the settlement and the procurement of cheques were by way of coercion and misrepresentation. The right to further cross-examine the witness was closed vide a speaking order M/s Aruna infracon P. Ltd, Vs. Ravindra CP Navelcar Page no. 70f 24 . o oe CC Na. 4934 WIS dated 17.05.2014. The complainant closed its evidence vide a separate statement of the Authorized Representative.
12. in the statement of the accused recorded under Section 313/281, Criminal Procedure Cade, the accused stated that he was innocent.
The cheque bore his signatures and the contents were filled by him and that he had handed over the cheque to the complainant. He mentioned that he was blackmailed by the complainant. He admitted receiving the statutory legal notice of dishonour. He also mentioned that he was never paid the money by the complainant and that the complainant played a fraud on him and the complaint regarding the fraud was filed by one of the Directors of M/s. Anirva Developers Pvt. Ltd, before Company Law Board. He further mentioned that he was not known to the complainant prior to issuing the cheque in question. There was misrepresentation on the part of the complainant. He contended that he did not owe any money to the complainant.
Arguments
13. Ld. Counsel for the complainant submitted that the cheque in question was admittedly issued by the accused towards discharge of his debts /Nability accrued on account of property known as "Tower Property'. The cheque was presented and dishonoured, the legal demand notice was sent and reply was received. He further submitted that the complainant had even issued the advance notice to the accused before presentation of the cheque. He argued that the essential ingredients of the offence under Section 138 of the NI Act were satisfied in the present case rather the accused took different and contradictory stands at different stages as in the reply dated 25,04,2010, the accused mentioned that the settlement was procured by Satish Julka but no allegation was mentioned against the complainant. At the time of framing of the notice, the accused after admitting his signatures and M/s Aruna Infracon P. Ltd. Vs. Ravindra C.P Naveicar Page 10,8 of 24 eC Na. IGS eis the handwriting, mainbilned that the cheque was taken fram hin by misrepresentation and coercion by purparted directars of the company. He also named certain persons out of which only Ravi Arora is the director of the complainant company and others were never the Directors of the complainant gimpaay. He also argued that the accused had sufficient time to fake steps te issue directions to the Banker to nat to honour the cheque in question an presentation but no such steps were taken. He further contended that in his statement recorded in the Court, the accused mentioned that he was blackmailed by the complainant but again the accused did nat substantiate the claim. He alse mentioned that in the cross examination, the accused portrayed that the settlement was a product of fraud whereas he himself is relying upon the same agreement to defend the present case. He submitted that the accused cannot be allowed to approbate and reprobate at the same time, Ne placed reliance upon Mumbai International Airport Pvt. Led. v. Golden Chariot Airport, (2010) 10 SCC 422. He further argued that the accused had taken the defence that the cheques were procured by way of misrepresentation and coercion however in cross examination it was portrayed that the cheques were issued as collateral security thereby making the defence contradictory, He also submitted that the accused failed to produce any evidence to rebut the presumption in favour of the complainant. He contended that except vague submissions, the accused did not produce any cogent evidence in order to rebut the presumption, He prayed that the avcused be convicted and placed reliance upon the following judgments:
a, Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd.
& Ors, AIR 2000 SC 954.
b, V.N. Deasthall y. State through CBI, 2010 (1) JCC 466.
M/s Aruna infracan P. Ltd. Vs. Ravindra CP Novelcer Page no. 9 of 46 CO Na, 4034 7d c. Smt. Shashi Bala v. Sh, Rajiv Arora, FAO No, 185/ 2001 decided on 21.03.2012 d. Sh. Satyendra Kumar Sharma v. jitender Kudsia, 2005 (119) DLT 498, e Sarwan Singh v. State of Punjab, (2003) 1 SCC 240.
f{ Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd, (2016) 10 SCC 458.
g. HMT Watches Ltd. v. MA Abida, (2015) 11 SCC 776.
h. Kirti Premraaj Jain v. Moser Baer Clean Energy Ltd. Cri. M. C. No. 3462/2014.
i. KS. Bakshi & Anr, y. State & Anr. (Delhi), 2008 (3) JCC (NI)
267.
j. M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd., 2002 SCC (Cri.) 121.
k. Ashok Kumar v. Gulshan Kumar, 2009 (4) JCC (ND) 288.
£ V.S Yadav v. Reena, 2010 (4) JCC (NI) 323 m. GL Sharma v. Hemant Kishor, Cri. A. No. 1400/2011.
n. Rangappa v. Mohan, 2010 Cri. LJ. 2871.
o. Lekh Raj Sharma v. Yash Pal Gupta, 2015 (6) AD (Delhi) 223.
p. Bharat Barrel and Drum Manufacturing Co. v. Amin Chand Pyarelal, AIR 1999 SC 1008.
q. Uttam Ram y. Devinder Singh Hudan & Anr., Cri, A. No. 1545/2019 (Supreme Court) r. Bir Singh v. Mukesh Kumar, Cri. A. No. 230-231/2019 (Supreme Court).
14, Per Contra, Ld. Counsel for the accused argued that the legal presumptions are rebuttal in nature. He mentioned that the basis of the M/s Aruna infracan P. Ltd. Vs. Ravindra C.P Navetcar Page ng.10 of 2 4 | CCU No, $9348 808 cheque in question was the agreement/settement dated 16.03.2009 where the first party was the accused herein, the second being M/s Anirva Develapers and third being the complainant company. He argued that the agreement is crucial as it gives hirth te the cheque in question. He thereafter argued that the agreement includes three lands. He conceded that the accused did not own the Tower Property and the accused had signed the apreement to seek bail. He further contended that the parties had decided that the accused will settle with the bank for the first property or the Ravindra Land and give it to M/s Anirva Developers by bearing the litigation and other charges. Whereas for the third property ie. the Tower property, the complainant and the second party had to fulfill certain obligations as provided under clause 9 of the agreement. He further argued that the according to clause 11, seven cheques were issued for an amount of Rs. 35 Crores which were the collateral security. The complainant had to first invest in the Tower Property and negotiate with the Arch Diocese. The accused according to him was to only secure the recoverable debt of the Rs. 20 Crores. He also argued that there was a prerequisite to issue one month's notice to the accused before presentation of the cheques however, the complainant did not issue the notice. He further contended that this was also pointed out by the Hon''ble High Court In the order dated 18.01.2019. He submitted with much vehemence that the notice was sine qua non and the complainant never mentioned the breach of the condition on the part of the accused. He mentioned that the Suit for recovery instituted before the Hon'ble High Court by the complainant also does nat contain or make any reference to the said advance notice. He also mentioned that the Hon'ble High Court has categorically ordered that the notice was not issued but the complainant has | not challenged the same thereby giving finality to the finding that the notice M/s Aruna Infracon P. itd. Vs. Ravindra C.P Naveicar Page no.11 of 24 | "Ae . Hears (0 Be AVSAING was fot Issued. He further submitted that the com plist is haved on incarrest facts and pointed out to the crose examination of CWI to show that the witness has stated that the cheques were not given in mediation whereas He complaint mentions so. He alse contended that Satish julka was a necessary and material witness but the complainant failed to examine him. Ne contended that the receipt Hled on record hy the com plainant cannot be read in evidence due to lack of formal proof as the same is a photocopy. I was further contended that the entire agreement was a product of fraud and that there was no lability of the accused. It was prayed that the accused be acquitted.
1, i have heard the rival submissions and contentions raised by hath the counsel, | have also perased the entire case record meticulously. | have appreciated the evidence adduced by the complainant and have weighed the rival contentions raised.
Position of Law
1. Section 138 of the NI Act has been analyzed by Hon'ble Supreme Court in Kusum Ingots & Alloys Ltd v. Union of India and Anr., Appeal No. 9159 of 2003, date of decision- 28.04.2004 and several other precedents wherein the Apex Court said that the following ingredients are required to be satisfied for making out a case under Section 138 of the NI Act:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other Hability;
(ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(iii) that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the M/s Aruna Infracon P. Ltd. Vs. Ravindra C.P Navelcar | Page no, 12 of 24 . :
CC No. 49547216 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;
{iv} the payee or the halder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid:
{v} 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;
{vi} complaint is filed in writing within one month of the date on which cause of action arose.
L?. Statutory and legal presumptions in favour of payee/ complainant as laid down by the Act and precedents can be summarized as follows:
(i) Presumption as to liability: it shall be presumed. unless contrary is proved that the holder of cheque received the same in discharge of any debt or liability. [Section 139 and 118(a)]
(ii) Presumption of dishonor: court shall presume dishonour of cheque on production of bank's slip or memo having official mark denoting that cheque has been dishonored unless such fact is disproved. (Section 146)
(ii) Service of legal demand notice: notice sent at correct address by making complete payments of postal expenses in advance deem to be served and drawer has to show during trial after leading evidence that same was not served. (C.C. Alavi Haji v. Palapetty Muhammed, 2007 CrLL.J 3214).
M/s Aruna Infracon P. Lid. Vs. Ravindra C.P Navelcar "Pageno.130f24. 0 CO No. A954 216
18. In the present complaint, it is naw an imperative to see whether the constituents of the Section 138 of NI. Act are existent or not. Itis admitted that the cheque in question was signed and issued by the accused. It is matter of record that the cheque was presented and dishonoured. The issuance of the legal notice is alse not disputed as the accused has fled the reply to the same. It is now to be determined whether there existed any legally enforceable debt or not.
19. it is a well settled position of law that when a negotiable instrument is drawn, two statutory presumptions arise in favar of the complaint, one under Section 139 NI Act and another under Section 118{a) of the NI Act. Further, the court will presume a negotiable instrument for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or it considers the non- existence of the consideration so probable that a prudent man ought under the circumstances of the particular case to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defense. Reliance is placed on M.S. Narayana Menon vy. State of Kerala, (2006) 6 SCC 39. As per the scheme of the Negotiable Instruments Act, in case the constituents of the Section 138 are proved, a presumption arises as to the cheque having been issued in discharge of a legal liability and the burden of proof would then lie upon the accused to rebut the said presumption which has been referred in several judicial pronouncements as 'reverse onus' Therefore, it is now incumbent on the accused to lead evidence to show non-existence of any liability, Through precedents such as Vijay v. Laxman, (2013) 3 SCC 86, it is now established that the accused has to rebut the presumption on the scale of preponderance of probabilities, The accused is required to make his version reasonably M/s Aruna infracon P. Ltd. Vs. Ravindra CP Naveicar CC Ne, d08a 276 probable. It is considered trite that the court takes into consideration the circumstances appearing in the evidence to determing whether the presumption should be held to be sufficiently rebutted, This can be utilized by the accused by either leading own evidence in his defence or shaking the yeracity of the testimony of the complainant through the test of cross examination. For rebutting such presumption, what is needed is ta raise a probable defence, Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon, 20, The legal presumptions are clearly in favour of the complainant. Nonetheless, in the peculiarity of the given facts, it needs to be appreciated that whether there was a legally recoverable debt or not. itis the case of the complainant mentioned in the complaint that the accused had handed aver the cheques towards the discharge of part liabilities accrued on account of dues of the accused towards the complainant company during the course of mediation proceedings held in Hon'ble High Court. The complaint is silent about the these "part Habilities accrued on account of dues". There is no mention in the complaint that how these liabilities accrued pertaining to which transactions, how were they part discharged and what were the Habilities left to be discharged. The complaint leaves all these questions unanswered and it vague and ambiguous about the liability of the accused. However, the Agreement/Settlement between complainant and accused was annexed with the complaint. The affidavit filed in pre summoning evidence is the complaint spelt out in verbatim so it also does not reveal the transaction or the liability stemming from the transaction. The cloud of mystery surrounding the alleged transaction is lifted only on perusal of the agreement/settlement dated 16.03.2009, Ex. CW1/C (OSR) which came in the M/s Aruna Infracon P. Ltd. Vs, Ravindra C.P Navelcar CO No. A954 7/16 post summoning evidence of the Authorised Representative of the complainant, Sh. Ravi Arora. It is pertinent to mention that even the post summoning affidavit did not mention any of the details of the transaction. Therefore, except the agreement, the complainant has no where provided any details ahout the transaction or the Hability. Hence, the contents of the agreement dated 16.03.2009 need to be seen and evaluated. The agreement is mentioned to have been arrived during the Mediation proceedings. The complainant failed to mention that why was it a party fo the proceedings which Jed to the Mediation proceedings and what was the nature of the proceedings. The agreement also does not throw any light on this aspect.
21. However, on perusal of the agreement, Ex. CW1/C (OSR}, it is apparent that the agreement was a tripartite agreement between the accused as first party, M/s Anirva Developers Pvt. Ltd. through its directors (1) Sh, Satish Julka (2) Sh. Amardeep Julka, (3) Sh. Baldev Julka and (4) Sh. Ravi Arora as second party and the complainant company as third party through its Director, Sh. Ravi Arora. The agreement goes on to describe three pieces of land including a land referred as 'Tower Property' for the purchase of which, the complainant company had paid a sum of Rs. 5,65,00,000/- to the accused. The payment has been mentioned to have been acknowledged by the accused vide receipt dated 07.08.2007. Strangely, the alleged receipt was filed in photocopy and could not be proved. However, what is material here is that the agreement also mentions that the receipt was dated 07.08.2007 acknowledging the receipt of payment of Rs. 5,00,00,000/- but CW1 in his cross examination produced a document Ex CW1/D1 which is a document issued by the Union Bank of India on 04.02.2009 reflecting that by 07.08.2007, the alleged date of the acknowledgment, the complainant M/s Aruna infracon P, Ltd. Vs. Ravindra CP Novelcor Page no 16 of 24 CC No. F035 42518 company had paid on Three Crores and Fifty Lakhs to the accused as against the acknowledgment of receipt of Five Crore Rapees which raises doubt on the case of the complainant. Then again, the complainant has maintained that it had paid an amount of Rs. 5 Crores whereas, the agreement reflect a payment of Rs. 5,65,00,000/-. CW1 mentions that the rest of the payment was given by Sh. Satish Julka on behalf of the complainant company. However, no such evidence has been fed to substantiate the same.
22, Moving further, the agreement goes on to mention that the complainant came to know that the M/s Anirva Developers {the Second Party) does not have clear title of the property but the possession was with the accused. It appears that in the haste to come at a settlement it has been incorrectly mentioned to be the second party rather it should have been the first party. It also mentions that the complainant had filed a Criminal Complaint no. D-894 on 25.02.2009 before EOW Cell which was agreed to be withdrawn in consideration of and subject to the accused performing the obligations and undertakings mentioned in the agreement. The agreement further in clause 7 mentions that the accused hands over the vacant, physical, peaceful possession of the Tower Property to the complainant and shall co- operate with the sale of the property in favour of the complainant from Arch Docese, who is the owner of the property. The clause 8 mentions that the payment received fram complainant will be treated as the payment against the agreement to purchase a land described to be Mahesh Land which was to be procured by the accused before 31.08.2008 (the date of agreement is 16.03.2009) and thereafter was to be transferred to second party and the complainant for balance consideration. On failure to procure the land, the amount was to be treated as advance payment of Tower Property. Clause 9 M/s Acuna Infracon P. Ltd. Vs. Ravindra C.P Naveicar Page no. v7 of 24- | CO No. A9547/16 provided that the accused released all his rights in Tower Property in favour of second party and the complainant and gave them exclusive rights to negotiate sale deed / collaboration deed /joint venture deed. It was agreed that the money required to procure the Tower property would be invested by the second party and the complainant and the profits if derived from the proceeds of Tower property were to he shared with the accused at the rate of 788% to the accused and retention of 25% by the second party and the coniplainant. Clause 10 also mentions that second party and the complainant shall be at Hberty to exercise the rights in the lands described so as to secure the clear title of all three properties and recover their money with interest.
aad
23. The clause 11 provides that in order to secure the recoverable amount and interest, the accused had issued post dated cheques of Rs. 45,00,00,000/- which could have been renewed and it was agreed that in event that any cheque is presented, the presenter shall serve one month's notice to the accused informing the intention to present enabling the accused to arrange for the requisite amount. The same clause mentioned that the breach of the terms of the agreement were not compensable in money despite the issuance of cheques as collateral security. From the above clauses, the complainant derives that there was an existing legal debt recoverable from the accused. However, the element of "discharge of part of liabilities"
stil remained unexplained.
24, The accused raises defence of misrepresentation and coercion in abtaining the cheques and through the cross examination raised defence of non-fulfilment of issuance of requisite advance notice and existence of no legal liability especially in light of the reciprocal obligations in the agreement 2 dated 16.09.2013.
M/s Aruna Infracon P. Ltd. Vs. Ravindra C.P Navelcar Page no : 18 of 2s : : se | . _ oe CO No. 4934 2°76 2a. The first defence raised by the accused was that the cheques were taken from him by misrepresentation and coercion by the Directors of the company- Satish Julka, Amardeep Julka, Ravi Arora and Baldev Arora, Primarily, it is worth observing that except Ravi Arora none of the athers mentioned are the Directors of the complainant company. Moreover, except this bald assertion, the accused could not show the misrepresentation caused by the Director of the complainant as nothing was extracted from the cross examination of CW-1 pertaining to the misrepresentation alleged and nature thereto. The accused failed to show the representation provided by the complainant which was incorrect so as to be termed as misrepresentation. Further, the element of coercion is also not explained. The only explanation given by the Id. Counsel for the accused during arguments was that the fear of incarceration again was looming large on the accused which he argued to be coercion extended by the complainant. However, it cannot be ignored that it was the accused who himself relied upon the agreement before the Hon'ble High Court. The accused cannot be allowed to take advantage of the fact on which he has himself availed benefit. Moreover, the accused cannot be stated to have raised a probable defence as it remained completely unsubstantiated. There is nothing on record to show that the cheques were handed over under misrepresentation or coercion. This is further substantiated from the fact that the accused did not take any steps that a prudent person may have taken to protect himself from the liability of the cheques. He did not issue any directions to his Banker to not to honour the cheque on presentation. Moreover, the accused also did not care to seek legal remedies available to report the alleged misrepresentation or coercion. The defence hence is completely bald and falls flat- unable to raise a probable defence.
M/s Aruna infracon P. Ltd. Vs. Ravindra C.P Navetcar , Page n 19 of 24 Ae, . ee CO No, 49547/16
26. Secondly, the accused had asked several questions from CWI pertaining to non fulfilment of the issuance of advance notice before presentation of the cheques. This defence also remains moonshine as the advance notice which was made mandatory by the agreement was only to enable the accused to ensure that the amount was available in his account. This contention does not hit the root of the matter as if the purpose of the notice was only for insurance of timely payment on presentation, the same could have been ensured to be made on receipt of the legal notice dated 23.03.2010 sent on 30.03.2010. The accused had ample time to make the payment however, the same was not made. Similarly, the filing of the Complaint was also sufficient notice to make the payment (reference made to CC Alavi (Supra)). However, the accused choose not to make the payment. Therefore, non- issuance of the notice shall not bring any fatality to the case of the complainant.
27. Then it was contended again through cross examination of CW1 that there exists no legal liability especially in light of the fact that the complainant himself did not fulfil the reciprocal obligations and hence, the accused cannot be said to have breached the contract to give the right to the complainant to file the present proceedings. To analyse this, the terms of the agreement needs to be revisited. From the plain reading of the clauses referred above itself, it is amply clear that the cheques were issued as a collateral security to ensure that the agreement is performed. The accused was under the obligation to clear the title of a land described as 'Mahesh Land' and the complainant and the second party were under agreement to make investment for procurement of the Tower Property and had the complete rights to negotiate and secure their title. The complainant seemed -
M/s Aruna infracon P. Ltd. Vs. Ravindra €.P Naveicar Page no. 20 of 24... > CC No fO8d 276 mw have clear knowledge that the accused did not hold any tithe of the Tower Prapentin Howes agredd that the accused will co-operate with the sale from awh Mocese in daeour of the complainant however, the manner of co- aperatios was left to imagination. Therefore, it remains unclear that what were the obligation en the part of the accused pertaining to the Tower Fraperty, He had already transferred the possession and all the rights, degpite not having any rights qua the title, to the complainant. The fact that dhe accused dows not have any title was well within the knowledge of the camplaniant as sanie was the reason behind filing criminal complaint before she ROW Cell. The night of negotiation was already with the complainant. The agreement bi Clause 7 mentioned that the accused shall co-operate with the sale af the property in faveur of the complainant from Arch-Diocese but Clause 8) mentioned that the investment shall be arranged by the second pany and the complainant to procure the Tower Property from Arch Diocese os favene af accused with back te back arrangement of registration of land in Gre af the second party and the complainant. Hence, the agreement itself epeates ambiguity pertaining to whom was the property intended to be sold ta. The said obligations were made without having any participation from the getual awner of the property and in complete absence of knowledge of the tention af the actual owner to even sell the property. Nevertheless, it is clear that the complainant was required to invest money for procurement of the preperty. The Complainant has not adduced any evidence for raising the tAveshrent or utilizing the right to negotiate with the actual owner. Further, the complainant despite reserving the right to file suit for specific performance in eventuality of breach or threat of breach as the contents of the agreement were not compensable by money, did not make any efforts to seek this remedy before the courts of law.
Ades Anune infracon P, Ltd. Vs, Ravindra CP Naveicar Page no. 21 of 24 C0 Na. MOSFET Au, It is already admitted by CW1 that the cheque was for the transaction ef Tower Property, It was mentioned by the witness:
"He is correct that the cheque in question was issued by the gecused in relation to a praperty titled as Tower Land situated at Parvor Vasdeh Goa"
2. Therefore, it is the admitted case that the cheques had na relation to the obligations for Mahesh Land. As has been mentioned above, the complainant clearly had obligations pertaining to the procurement of the 'Tower Property, The witness also mentioned in his cross examination that:
"Im real sense, Mr. Navelkar only misrepresented by giving the said post dated cheques of Rs. 35 Crores as collateral security because all the lands what he represented in the settlement agreement never belonged to him eg. Ravindra land, he had sold it to Anirva Developers which was already mortgaged with Goa Cooperative Bank and hence, further auction and auction purchaser has already purchased it through bank and Mahindra Land approx. 65 Sq. Mtrs. never belonged to him and Tower land belonged to some trust of the Church. So in real sense, there was no collateral security. 1 think this settlement agreement was only signed so that he could get interim bail from the Court and which he did."
30. This also reflects that the complainant had complete knowledge that the accused could not have transferred the title of the Tower Property to the complainant as the accused never had the title upon the property. Moreover, as discussed above, the right to negotiate and the obligation to invest vested upon the complainant. CW1 went on to state in the cross M/s Aruna infracon P. Ltd. Vs. Ravindra C.P Navelcar | Page no. 2 of 24 On CC No. ABE 28 . . aes eae r s Rs CTUres examination that the complainant company was to get only Rs. 10 Creare alongwith interest from the date of the dishonouring of cheques without any further obligation. However, this Is contrary to the terms of the agreement a hat at pwer the vidence.
amit the ducumentary evidence shall prevail over the eral evide ct wy ~ we x . ye 3 sy = x Therefore, the defence raised by the accusedl has same merit and is probable that there were obligations an the part af the complainant which were required to be fullled before the eallateral security could be encashed and for considering breach violation on the part af the accused.
Bh. Qnee, a probable defence is raised, the onus shifts back to the complainant te prove the guilt beyand reasenable doubts. The complainant howerer has nat heen able to show that once it has not fulliied the obligations on its part, how the collateral security shall become a legally recoverable debt, No evidence has been led te show that the complainant had negotiated or that had arranged the investment or had met the actual owner to negotiate a sale deed /collaboration deed ar a joint venture. The complainant was not able te substantiate the same in light of the probable defence of nen- existence of legally recoverable debt. It cannot be denied that the legal presumptions are in favour of the complainant but at the same time, the complainant has to show that there was an outstanding lability of the accused at the time of presentation of cheque in question which has not been shown in this matter.
33, The complainant has relied upon several judicial pronoancements. The fadgments can be discussed ane by one as well however, the gist shall be that the judgments relied upon whether it is Kusam Ingats, MMTC Ltd, Ashok Kumar, ¥.4 Yadav, GL. Sharma, Rangappa, Lekh Raj Sharma, Bharat Barrel, K. 8 Bakshi, Kirt! Permraaj jain, Shashi Bala, Satyendra .
Més Aruna infrocoa Pe. bid WS. Bawwndra CP Anancar CC No, 4954716 Kumar Sharma, Sarwan Singh, V. N. Deosthali, or Mumbai International Aiport Pvt. Ltd. [citations have been mentioned in detail in the preceding paragraphs) hold the true position of law and reliance has been rightly place on them to show the interpretation of law in matters pertaining to Section 138 Negotiable Instruments Act. Having said that, it is also pertinent to mention that the said judgments itself explain the law that when a probable defence is raised, the defence needs to explored,
33. Similarly, the judgments of Sampelly Satayanarana Rao {supra} and HMT Watches (Supra) provide for circumstance when cheque has been issued as a security, It can be observed that in the present case doubt has been raised upon the liability itself and whether it was outstanding at the time of presentation of the cheque is doubtful. Hence, these judicial pranouncements though hold the correct position of law but do not rescue the case of the complainant.
Conclusion 34, In light of above discussion, | hold that the complainant has not been able to prove his case beyond reasonable doubts. The defence of the accused Is accordingly held probable.
35. Accused is therefore, acquitted of offence u/S. 138 of Negotiable Instrument Act, 1881.
Announced in open court (Tanvi Kh today i.e. on 19.10.2020 Metropolitan All 24 pages have been checked Patiala House, New Delhi and signed by me. 19.10.2020.
M/s Aruna Infracon P. Ltd. Vs. Ravindra C.P Navelcor -- Page no. 24 of 24 a : . 2 oat : - ee