Delhi District Court
Sh. Naval Kumar Rastogi vs . M/S Viniyogo Clothex Ltd. & Others on 21 September, 2012
IN THE COURT OF SH. RAKESH KUMAR SINGH:
METROPOLITAN MEGISTRATE (NI ACT)-1, CENTRAL:
ROOM NO.-356, TIS HAZARI COURT COMPLEX, DELHI
21.09.2012
CC. No. 2328/10
Sh. Naval Kumar Rastogi Vs. M/s Viniyogo Clothex Ltd. & others
JUDGMENT u/s 264 Cr.PC.
Complainant has filed two complaints against the accused. Subsequently,
however, complainant withdrew the case against one of the accused namely Vinay
Baghala. Later on, authorized signatory of the cheques were revealed to be Mr. D. K.
Goel and Mr. Mahesh Chandra. Ld. Predecessor also summoned the said two persons
vide his orders. Several attempts have been made to serve the said two persons. Case was
filed in the year 1997. Ultimately, on 11.05.2012 it was directed that the cases could not
continue against Mahesh Chandra and D. K. Goel in such circumstances. Several efforts
were made to serve the accused company, however, of no avail. Ultimately on
15-09-2012 it was directed that file may be taken up against the company, whenever the
complaint will file fresh address of the company.
2. In terms of judgment of Hon'ble High Court of Delhi in "Rajesh Agarwal v
State & Another 171(2010) DLT 51", the proceedings was continuing against accused
no. 3 A.G. Gaggar. It was held in that case as under:
"An issue arises where there are many accused persons in a case and some
of them are not appearing, should the court proceed against those who are
appearing or should wait for the completion of service of all the accused? I
consider that summary trial leaves no option to the court. The whole
purpose of summary trial shall stand defeated if the court of MM tells the
accused persons, who have been served, to come to the court repeatedly till
the other accused areserved. The plea of the accused is to be recorded on
the day of his appearance under the summary trial and if that accused gets
his plea recorded, he is at liberty to lead evidence in support of his plea and
the court cannot tell him to keep coming repeatedly either in person or
through counsel due to non appearance of other accused persons. The court,
in such a case, asks him to disclose his defence and to prove his defence. In
case court feels that the case should not be tried summarily and all the
Sh. Naval Kumar Rastogi Vs. M/s Viniyogo Clothex Ltd. & others 1
accused persons must necessary be tried together, then alone the court
should ask the accused to wait but if the accused / respondent has a valid
defence to show that he need not face trial because of a specific defence and he was prepared to lead evidence to this effect, he should be directed to lead evidence in support of his plea".
2.1 Accused no. 3 has cross-examined by the complainant and also filed certified copies of certain orders U/s 294 Cr. P.C. authenticity of which was admitted by the complainant. He, however, not led any defence evidence. Ultimately, arguments were heard. Written arguments also heard from both the sides.
3. Claim of the complainant is very simple. That against an invested amount of Rs. 80,000/- @ of 15 % interest per month, the accused company had issued 6 cheques of Rs. 450/- each for interest of three months and two cheques of Rs. 40,000/- each towards repayment of principal amount.
3.1 Against this accused no. 3 claimed that he was not an active director of the accused company and that no personal notice was served upon him. His cross- examination the entire trust of the accused no. 3 was on the fact that complainant had withdrawn the complaint against Vinay Baghala after receiving payment of the cheques. This was categorically denied by the complainant. Virtually, accused failed to cross- examine the complainant on material particulars and in the absence thereof claim of the complainant has to be accepted.
3.2 It goes without saying that a skillful cross examiner must hear the statements in chief examination with attention, and when his turn comes, he should interrogate the witness on all material points that go against him. If omits or ignores then they may be taken as an acceptance of the truth of that part of witness evidence.
In Babu Lal Vs. Caltax (India Ltd.) A 1967 C 2005 it was ruled:
"generally speaking, when cross examining, a party's counsel should put to each of his opponents witness in turn, so much of his case as concerns the particular witness or in which he had a share............if asks no questions, he will be taken to accept the witness account."
Sh. Naval Kumar Rastogi Vs. M/s Viniyogo Clothex Ltd. & others 2 In case titled, "Satyender Kumar Sharma Vs. Jitender Kudsia" 2005 DLT 498 Hon'ble Delhi High Court while referring to Section 138 Evidence Act qua cross examination ruled:
"If a witness is not cross examined on a particular point , the opposite party must be deemed to have accepted truth of the statement."
Hon'ble High Court of Delhi in State Bank of India Vs. Kaushal Plastics and Ors. 85 (2000) DLT 558 has observed that :
"He has not been cross-examined on this part of his statement. There is no other evidence in rebuttal also. Even no arguments have been addressed to dispute his testimony. There is no reason not to believe this unchallenged testimony of PW1."
Hon'ble Punjab and Haryana High Court in Mahant Mela Ram Vs. S.G.P.C. Amritsar AIR 1992 P&H 252 has held that:
"It is well established rule of evidence that a party should put to each of its opponents witness so much of this case as concerns that particular witness. If no such questions are put, the Courts presume that the witness account has been accepted."
3.3 As such it has to be accepted that accused no. 3 has admitted the liability of the accused company towards the complainant. It is significant to note that Section 141 NI Act does not require the personal liability of any director.
4. I do not find any force in the contentions of Ld.Counsel for the accused regarding non-service of personal legal demand notice. Section 138 requires service of notice on the drawer of cheque. The cheques in the instant cases have been issued by the accused company. Once notice is served upon the accused company there is no requirement of service of personal notice on each and every director.
Hon'ble High Court of Delhi in Jain Associates And Ors. vs Deepak Chawdhary & Co. 80 (1999) DLT 654 has held that:
"15. As regards the requirement of service of notice on all the partners i.e. petitionersNo. 2 and 3 is concerned the notice was to be served "on the Sh. Naval Kumar Rastogi Vs. M/s Viniyogo Clothex Ltd. & others 3 drawer of the cheque". In the present case, the drawer is a partnership firm acting through one of its partner. Section 141 of the Act is a deeming provision holding every person who was incharge of and was reasonable to the company for the conduct of the business of the companyor partnership firm as well as the firm shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Section 141 does not require that each and every partner of the firm is required to be issued notice. The above said deeming provision imposing vicarious liability is to be seen in the right of the observations of the Supreme Court in M/s. Electronics Trade and Technological Development Corp. Ltd. Secundrabad Vs. M/s. Indian Technologist and Engineers 1996 JCC 155 supra. Accordingly on the basis of the language of clause (b) of proviso to Section 138, one finds it difficult to accept that each and every partner or Director is required to be served with a notice."
5. I do not find any force in the contentions of Ld. Counsel for the accused regarding withdrawal of complaint against other accused. Section 257 Cr. P.C. talks for withdrawal of complaint and it does not prohibit the complainant from withdrawing the complaint only qua an accused.
6. It even appears that accused no. 3 has been willing to pay the complainant with share of liability. It is also fortifying the mandatory presumptions of law available in favour of the complainant.
7. There is nothing to show that accused no. 3 was not actively involved in the business of accused company. Categorical allegations against the accused no. 3 regarding the responsibility of day to day affairs of accused company are available at para no. 7 of complaint and also in the para no. 10 of affidavit. It was for the accused to establish that he was not responsible.
8. In the present case, the mandatory presumption are available and the same have not been rebutted by the accused. The complainant has been able to establish the existence of liability by virtue of mandatory presumption of law and also on the basis of his uncontroverted testimony. It may be noted that section 139 NI Act nowhere says that the presumption will be available against the drawer. It simply raises a presumption in favour of the holder and not against any specific person. As such accused cannot claim Sh. Naval Kumar Rastogi Vs. M/s Viniyogo Clothex Ltd. & others 4 that the presumption cannot be raised against any individual director of accused company. I consider that the question has been sufficiently answered in Anil Handa v/s Acrylic Limited AIR 2000 SC 145, wherein it has been held as under :
"14... The next contention is that under section 139 of the Act there is a legal presumption that the cheque was issued for discharging an antecedent liability and that presumption can be rebutted only by the person who drew the cheque. It was argued that premises that if the drawer company is not made an accused the remaining accused would be under a handicap since the presumption would remain unrebutted. Section 139 of the Act reads thus: 139. Presumption in favour of holder. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
15. The aforesaid presumption is in favour of the holder of the cheque. It is not mentioned in the section that the said presumption would operate only against the drawer. After all a presumption is only for casting the burden of proof as to who should adduce evidence in a case. It is open to any one of the accused to adduce evidence to rebut the said presumption. In a prosecution where both the drawer company and its office bearers are arrayed as accused, and if the drawer company does not choose to adduce any rebuttal evidence it is open to the other office bearers accused to adduce such rebuttal evidence. If that be so, even in a case where the drawer company is not made an accused but the office bearers of the company along are made the accused such office bearers accused are well within their rights to adduce rebuttal evidence to establish that the company did not issue the cheque towards any antecedent liability.
16. Hence we are not impressed by the contention that section 139 of the Act would afford support to the plea that prosecution of the company is sine qua non for prosecuting its directors under section 141 of the Act."
8.1 It goes without saying that the mandatory presumptions extends to the existence Sh. Naval Kumar Rastogi Vs. M/s Viniyogo Clothex Ltd. & others 5 of legally enforceable date of liability. A larger bench of Hon'ble Supreme Court of India in Rangappa vs S. Mohan (2010) 11 SCC 441) in following terms:
"In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein."
8.2 The accused has failed to convert the liability.
9. There are sufficient material to presume service of notice on the accused company. A three judges bench of the Hon'ble Supreme Court in C.C. Alavi Haji v. Palapetty Muhammed and Another (2007) 6 SCC 555 has held that:-
"Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation."
9.1 I have already discussed above earlier in this order that there is no requirement of service of notice on individual director.
10. Contentions of the counsel for the accused that evidence were not put to the accused under Section 313 Cr.. P.C does primarily have no basis. Reasons are simple. First of all, the trial has been conducted in accordance with the judgment of Hon'ble High Court of Delhi in Rajesh Aggarwal (supra) which provides only five steps and Sh. Naval Kumar Rastogi Vs. M/s Viniyogo Clothex Ltd. & others 6 directs that the matter to be listed for defence evidence after cross-examination of the complainant. Secondly, during the proceedings, i.e. the recorded of plea of the accused and cross-examination of the complainant, the accused was exempted. As such, he cannot blame to have an examination under Section 313 Cr. P.C which by its proviso provides for dispensation of such examination.
11. In view of the discussion above, it is held that accused has failed to rebut the presumptions of law and as such the accused has made himself liable for conviction for offence punishable U/s 138 r/w Section 141 NI Act. The accused namely A.G. Gaggar is convicted as such.
12. A copy of this order be placed on the official website of the District Court.
(Rakesh Kumar Singh) MM(NI Act)-01, Central 21.09.2012 Sh. Naval Kumar Rastogi Vs. M/s Viniyogo Clothex Ltd. & others 7