Delhi District Court
Girish Chandra Upadhyay vs Elizabeth Thankachen And Ors on 2 December, 2024
IN THE COURT OF SH. ANMOL NOHRIA,
JUDICIAL MAGISTRATE FIRST CLASS-02
NORTH EAST DISTRICT
KARKARDOOMA COURTS, DELHI
FORMERLY POSTED AS JUDICIAL MAGISTRATE FIRST CLASS (NI ACT)
DIGITAL COURT, SHAHDARA, KKD COURTS
CNR No. : DLSH02 - 005429 - 2022
CC No. : 961/2022
U/s : 138 N. I. Act
P.S : GTB Enclave
Girish Chandra Upadhyay Vs. Elizabeth Thankachen and Ors.
JUDGMENT
Judgment pronounced in terms of transfer order being reserved for final orders before the transfer.
1. Sl. No. of the case : 961/2022
2. Date of institution of the case : 27.06.2022
3. Name of complainant : Girish Chandra Upadhyay Vs. Elizabeth Thankachen and Ors.
4. Name of accused, parentage and address : Accused no.01 Mrs. Elizabeth Thankachen, W/o Sh. T. G. Thankachen CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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Accused no. 02 Mr. Tharun
Thankachen, S/o Sh. T. G.
Thankachen
Accused no. 03 Mr. T. G.
Thankachen, S/o Chacko George,
All partners in accused no. 04 M/s
Tharun Vac at E-77, Sec.03, Bawana
Industrial Area, Delhi 110039 also at
F-167, 2nd FL. Vikas Puri, Delhi -
110018
5. Offence complained of : 138 N. I. Act
6. Plea of accused : Accused pleaded not guilty
7. Final order : Accused no. 01, 03 & 04 convicted.
Accused no. 02 acquitted.
8. Date on which order was
reserved : 03.09.2024
9. Date of pronouncement : 02.12.2024
1. The instant matter has originated out of a complaint under section 200 Cr.PC read with Section 142 Negotiable Instruments Act (hereinafter referred to as the 'NI CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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Act'), filed by the complainant against accused persons under Section 138 NI Actread with section 141NI Act alleging that cheque bearing number 006762 dated 28.02.2022 amounting to Rs.10,00,000/- drawn on South Indian Bank, Vikaspuri, New Delhi issued by the accused no. 04 in favour of the complainant, in discharge of a legal debt or other liability, has been dishonored and the accused has not paid the said amount even after receiving the prescribed legal demand notice. By virtue of this judgment, the present complaint is being disposed off.
BRIEF REASONS FOR THE DECISION OF THE CASE Factual Background of the case:
2. Briefly stated facts of this case as per complaint are that the complainant is a practicing advocate engaged in the practice of tax consultancy. That the complainant is known to the accused persons for many years as he was providing many tax consultancy to them. In the month of July - August 2019, Accused no. 01 - 03 being partner of accused no. 04 approached the complainant for financial help of Rs.10,00,000/- and offfered to give 24 % interest per anum on the same. Thereafter the complainant advanced the said amount via banking channels and a loan agreement dated 02.08.2019 was entered between the complainnant and the accused persons. Thereafter on different occasions from April 2021 to January 2022, the complainant further advanced Rs.6,70,000/- to the accused persons for their business. Thereafter accused no. 01 to 03 being partner of accused no. 04 in order to discharge the liability of accused no. 04 issued cheque bearing number 006762 dated 28.02.2022 amounting to Rs.10,00,000/- drawn on South Indian Bank, Vikaspuri, New Delhi in partial discharge of liability. Thereafter, the said cheque issued by the accused person in favour of the complainant in discharge of their liabilities was returned by complainant's banker as unpaid for the reason "funds insufficient" vide memo dated 11.03.2022. Thereafter, the complainant issued a legal notice dated 28.03.2022 CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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demanding the amount of dishonored cheque within 30 days of the receipt of legal notice. Despite service of notice, the accused persons did not make the payments of amount of the dishonored cheque within 15 days from the date of the receipt of legal notice. Hence, the present complaint was filed under Section 138 r/w 141 of Negotiable Instruments Act.
Proceedings Before Court
3. On the basis of pre-summoning evidence, all the accused persons were summoned by the court for the offence under Section 138 r/w 141 of Negotiable Instrument Act. The accused no. 01 to 03 put in their own appearance and accused no. 03 appeared as an AR for accused no.04. Thereafter, notice under Section 251 Cr.P.C. was framed upon all the accused persons on 24.02.2023, to which accused persons pleaded not guilty and claimed trial. Statement under Section 294 Cr.P.C of all the accused persons was also recorded on 24.02.2023, wherein accused no. 01 and 03 have admitted their signatures on the cheque in question and both the accused alongwith accused no. 04 have also not disputed the cheque returning memo and accused no. 01 & 04 have also admitted receiving the legal demand notice.
4. The accused had orally prayed under section 145 (2) cross examine the complainant. By order dated 24.02.2023 the said request was allowed on the no objection given by the counsel for the complainant with respect to the same and accused was granted the liberty to cross examine the complainant under section 145(2).
5. During the trial, complainant has led the oral and documentary evidence against the accused to prove his case beyond reasonable doubt. The following evidence are as under:
CC No. 961/22Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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Oral Evidence
CW1 Girish Chandra Upadhyay (Complainant)
Documentary Evidence
Ex. CW1/A Aadhar Card of the complainant
Ex. CW1/B GST registration of accused
Ex. CW1/C Partnership deed of accused
Mark-D Loan Agreement
Ex. CW1/E Account statement of the complainant
Ex. CW1/F Original cheque bearing no. 006762
Ex. CW1/G Cheque return memo dated 11.03.2022
Ex. CW1/H Legal demand notice
Ex. CW1/I Postal track receipt
(colly)
Ex. CW1/J Certificate u/S 65B of Indian Evidence Act
Ex. CW1/1 Evidence affidavit of CW1
Complainant stepped in witness box as CW-1 and adopted his affidavit of pre-summoning as his evidence reiterating almost all facts of complaint, stating all exhibits available on record. The complainant was cross-examined at length by the counsel for the accused on 26.05.2023.
6. Complainant evidence was closed vide order dated 26.05.2023 and thereafter, the statement of all accused was recorded under Section 313 of The Code of Criminal CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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Procedure, 1973 read with Section 281 of The Code of Criminal Procedure, 1973 on 19.05.2023. Incriminating evidence was put to them.
7. Vide order dated 07.08.2023, the list of witnesses filed by the accused persons was allowed. Thereafter, the accused persons had led evidence as follows :-
Oral Evidence DW1 Jiten Thomas (Manager, South Indian Bank) DW2 Shyam Babu Sah (Manager, ICICI Bank) DW3 Inspector Ram Pal (Crime Branch, Delhi) DW4 SI Hemant (Crime Branch, NDR, R. K. Puram) Documentary Evidence Ex. DW1/A I-Card Ex. DW1/B Account statement of accused no. 04 from 01.08.2024 to 31.07.2021.
Ex. DW1/C Account statement of accused no. 01 from 01.12.2016 to 31.03.2017.
Ex. DW1/D Cheques
Ex. DW1/E Account statement of accused no. 04 from 25.07.2019 to
15.08.2019.
Ex. DW2/A I-Card
Ex. DW2/B Account statement of the complainant
(colly)
The said witnesses were cross-examined at length by counsel for the complainant and during the cross-examination of DW2, complainant had produced debit advice Mark-C1.CC No. 961/22
Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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8. No other witness was examined by accused & defence evidence was closed vide order dated 28.03.2024 and thereafter, matter was fixed for final arguments.
9. Afterwards, final arguments were heard on behalf of both the parties and after hearing the arguments, trial was concluded.
During arguments, Ld counsel for complainant alleged that the accused have been unsuccessful in rebutting the presumption against them and therefore, are liable to be convicted of the offence under Section 138 NI Act. He has further argued that the accused no. 01 to 03 being in-charge of the affairs of accused no. 04 are also liable for conviction u/S 141 N. I. Act. He has further argued that the evidence produced by the accused has not been able to shake the version of the complainant or to prove the version of the accused. He has filed his written arguments.
On the other hand, it has been argued by ld. counsel for accused, who has also filed his written arguments, that from the cross examination of the complainant as well as from the by way of his own evidence, the accused have been successful in rebutting the presumption against them. It is argued that accused no. 01 to 03 by way of independence evidence have been able to prove that they were not in-charge of the affairs of accused no.
04. It has been further argued that since the accused has been able to show that complainant has misused the cheques of accused no. 04 being the accountant of accused no. 04 therefore no legal liability exits of accused no. 04 and consequently no burden can be placed upon accused no. 01 to 03. It is further averred that in a criminal case the complainant has to prove his case beyond all reasonable doubts and since the complainant has failed to discharge the burden of proof upon him beyond all reasonable doubts, the accused is entitled to be acquitted.
10. I have heard the counsels for both the parties perused the record and have gone through relevant provisions of the law and the judgments relied upon by both the parties.
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11. For the purpose of affixing liability upon accused no. 1to 3 for the cheque drawn on the account of accused no.4 partnership firm under Sec.138 NI Act r/w Sec.141 NI Act, the ingredients of both these sections are to be satisfied.
APPRECIATION OF EVIDENCE- .
12. The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co- extensively. Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled.
13. In the case at hand, there is no dispute qua the proof of first, fourth and fifth ingredient. The complainant has proved the original cheque Ex. CW1/F, which the accused persons have not disputed as being drawn on the account of the accused no.4. None of the accused have disputed the signatures and it was also not disputed that the cheque in question were presented within a validity period. The cheque in question were returned unpaid vide return memos Ex. CW1/G, which stands proved in view of the admission by the accused persons in their statement u/s 294 Cr.P.C.
14. So far as the service of demand legal notice Ex. CW1/H is concerned, the accused no. 1, 3 & 4 have admitted the receipt of same in notice u/s 251 Cr.P.C as well as their statement's u/s 294 Cr.P.C as well as their statement's u/s 313 Cr.P.C., whereas accused no.2 claims that he is not aware whether partnership received legal demand notice or not. Although accused no.2 has admitted that CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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the address on the legal demand notice is correct, which raises a presumption under law that in general course of things and private business, accused no.2 was in receipt of the demand legal notice Ex. CW1/H. At this stage reference can be drawn from the Partnership Act, by virtue of the provisions of which notice to partner or to partnership is deemed to be notice to all partners. Also, a reliance can be placed upon Ranjit Tiwari v. Narender Nayya, 2012 SCC OnLine Del 3350.
15. Further the accused persons in their statement's u/s 294 have admitted the postal receipts Ex. CW1/I. In view of the admission by the accused persons of the legal demand notice Ex. CW1/H, postal receipt Ex. CW1/I, the same stands proved as non-disputed.
16. The questions which arise for consideration in the present matter are:
a) Whether presumption under section 118(a) read with section 139 of the Act can be raised in favour of complainant in the present case?
b) Whether the impugned cheque was issued by the accused no. 4 in dis- charge of a legally enforceable debt?
c) Whether accused no. 1, 2 & 3 were incharge of the affairs of accused no.4 in terms of Section 141 of NI Act?
I shall be deciding the above-mentioned points of determination separately.
a.) Whether presumption under Section 118 read with section 139 of the NI Act can be raised in favour of complainant in the present case?
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17. 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. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
18. 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 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, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
19. The Hon'ble Supreme Court in Kumar Exports vs. Sharma Carpets (2009) 2 SCC 513, while discussing the contours of section 118(a) r/w 139 of the N I Act, has held interalia the following:
"14. Section 139 of the Act provides that 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. Applying the definition of the word "proved" in CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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section 3 of the Evidence Act to the provisions of sections 118 and 139 of the Act, it becomes evident that in a trial under section 138 of the Act a presumption will have to be made that every negotiable intstrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under section 118 and 139 of the Act help him shift the burden on the accused. The presumption will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists."
20. In the instant case, the accused no.1, 3 & 4 at the time of framing of notice u/s 251 and statement recorded u/s 313 Cr.P.C have explicitly the issuance of cheque to the complainant with the rider that the same were issued as a blank signed cheque to the complainant acting in the capacity of Accountant of the firm and have been misused by him. However, there is no denial or dispute regarding the fact that the cheques were issued by accused no.
4. Ergo, there is no dispute qua the issuance of the cheques and signatures of CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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accused no. 1 & 3 on the same.
21. During the course of the trial, the accused no. 3 ie. Mr T.G Thankachen vide Authorization letter became the authorised representative of accused no. 4 and accused no. 1 & 3 have admitted their signatures on the cheque in question as well as the cheque return memo.
22. With regards to a blank cheque reference can be drawn from Section 20 of the NI Act talks about inchoate instruments. As per this provision if a person gives a duly signed cheque which is either blank or partly filled then he is deemed to have given implied authority to the holder to fill up the particular in it and complete the cheque, thus making the drawer liable for the payment mentioned in it. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provision of section 138 would be attracted.
23. The Hon'ble Supreme Court in the case of Bir Singh vs. Mukesh Kumar (2019) 4 SCC 197 wherein the Apex Court while upholding the validity of blank signed cheque in a proceeding u/s 138 of the Act has interalia held the following:
"If a signed blank cheque is voluntarily presented to a payee,towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."
24. In light of the above discussion, this court is of the considered view that, the ground that the cheque in question is a blank cheques does not hold water with this CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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court and even in case of blank signed cheques, the statutory presumptions under section 118(a) and 139 would be raised in favour of the complainant. Therefore, in instant case, since, the accused no. 1 & 3 have admitted the execution of impugned cheque as authorised signatories, the aforementioned statutory presumptions would be raised in favour of the complainant regarding the fact that the impugned cheques have been drawn for consideration and issued by the accused no. 4 in discharge of legally enforceable debt.
b) Whether the impugned cheque was issued by the accused no.4 in discharge of a legally enforceable debt towards the complainant?
25. 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 recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarize the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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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 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."
26. Since, the presumption as envisaged u/s 118 and 139 of the Negotiable Instruments Act is attracted in favour of the Complainant. As such, it is now incumbent upon the Accused to rebut the said presumption on the basis of preponderance of probabilities. The rebuttal of presumption can be done in two ways, i.e. either the accused punches hole in the case of the complainant and shakes the leg of the complainant's case or the accused brings some evidence to prove his own case.CC No. 961/22
Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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29. In the present case, the Complainant alleges that he is a practising tax lawyer and provides services of Tax consultancy to his clients including the accused persons. The accused persons 1 to 3 are partners in the partnership firm i.e. accused no.4 in the name and style of M/S Tharun VAC carrying business of manufacture of Auto spare parts and vacuum Metalizing. The present case pertains to a friendly loan where the complainant alleges that he had advanced money to the accused no. 4 i.e. partnership firm on assurance and persuasion by accused no. 1 to 3, being the partners of the firm on the basis of their long history of relationship. Further, all the partners are involved in day-to-day activities of the said partnership firm. Thereafter on 28/02/2022, the cheque was issued for amount of Rs 10,00,000 in the name of accused no. 4 duly signed by accused no. 1 and 3 for the loan advanced to the firm.
27. During the stage of framing of notice, the plea of defence undertaken by the main accused no. 4 is that cheque in question has been misused by complainant since he was entrusted with the blank signed cheques being the accountant of the partnership firm for payments due to government department/payment of tax/vendors.
28. The complainant has placed reliance upon the loan agreement (Exhibit CW1/D) entered between the complainant and the accused no. 3 on 2nd August 2019, which shows that the complainant had lent an amount of ₹10,00,00 through online transfer through ICICI bank, Dilshad Garden wide transaction, reference number RTGS: ICICR12019080100249538 dated 01.08.2019 and NEFT/001766820634 dated 02.08.2019 for the purpose of financing the business operations of the partnership firm, to which accused no. 1 and 2 have CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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also stood as guarantors and attesting witnesses to the said loan agreement and the said loan agreement has been duly signed by the complainant and the accused no. 3 respectively. Nothing substantive has been brought in the cross examination qua the said agreement to dispute its genuineness.
29. Further, the ledger of the complainant Exhibit CW1/E is corresponding and corroborating the transaction cited in the loan agreement as the closing balance as on 2 August 2019 against accused no. 4 is Rs 10,00,000 and as on 28 January 2022 is Rs 16,70,000 that corresponds to the claim made in the notice against the liability of the accused persons; and nothing substantial qua the same has been brought in the cross examination of the complainant.
30. From the cross examination of the complainant it transpires that he was admitted to be the accountant for the partnership firm (accused no.4) since 2016, but his association with the other persons was since 2002. In pursuance of acting in such capacity, he used to issue bills as part of his consultancy services to accused no.4, the scope of his work did not extend to keeping record of the bank deposit slip. CW1 categorically admitted that the contents of the cheque-in question i.e exhibit CW1/F was filled by him in the front of accused no. 1 & 3 except the signatures. During the cross examination, suggestion was vehemently denied by CW1 that he was in the possession of the duly signed cheque in question since he was acting as their accountant and responsible for payment of tax liability and payment to vendors. With respect to advancing loan to the accused persons, CW1 deposits that he has shown the loan transaction of Rs.10,00,000 and 6,70,000 to the partnership firm in his duly filed ITR with the CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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income tax department. The loan agreement between him and the accused persons is filed on the record as Mark D.
30. During the cross examination, a suggestion was made by the counsel for accused to CW1/complainant that all his dues have been paid in full, which is an implied admission on the part of the accused that they had liability towards the complainant. Nothing else substantive has been drawn from the cross examination of the complainant.
31. To summarize the discussion above, the onus upon the accused was to punch holes in the version of the complainant upon preponderance of probabilities to discredit the version of the complainant; and the accused has failed to do the same.
32. Since, the accused has not been able to disprove the version of the complainant, it becomes incumbent to discuss the evidence of the accused in order to prove his own case.
33. During the defence evidence stage, the accused persons vide their list of witnesses chose not to examine themselves as defence witness to prove the allegations stated by them against the complainant of misuses of cheques despite ample opportunities; and a negative inference can be drawn against them qua the same fact.
34. Further the accused have examined Sh. Jitin Thomas, manager of South Indian bank, branch, Vikash Puri as DW1; Sh. Shyam Babu, relationship CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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banking manager of ICICI bank, Dilshad Garden as DW2; Inspector Rampal, Crime branch as DW3 and SI Hemant, Crime branch as DW4 respectively.
35. DW1 brought the bank statement of the partnership firm from 01. 08. 2017 to 31.07.2021, which is Exhibit DW1/B and bank statement of Elizabeth Thankachen i.e Accused no. 1 for period of 01.12.2016 to 31.03.2017, which is exhibit DW1/C. Further, he brought front and back of three specimen cheques, which is Exhibit DW1/D and bank statement of partnership firm for a period 25.07.2019 to 15.08.2019 reflecting encashment of two cheque leaves, which is Exhibit DW1/E respectively. The witness was not cross examined despite opportunity.
36. Notably, the above mentioned transactions alleged and relied by the accused persons are in line with the debit advice and tax payments (challans) relied upon by the Complainant as Mark C (Colly). This negates the line of defence of the accused that the complainant has been paid full with respect to his dues, whereas these payments by the firm as reflected in the account statements of the firm have been received by the complainant in lieu of TDS/GST/TDS already paid by the complainant for the accused no. 4 and have been credited to the complainant after the aforesaid payments were paid on the behalf on the firm. 34. Also, the record finds credence from the cross- examination of the complainant wherein he deposed that the aforesaid payments may have been made to him in lieu of the payments against GST,TDS and income Tax of the all accused persons and assured to produce the details of aforesaid documents, which were later made part of the record in form of Mark C (colly).
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38. Thus, from the perusal of the testimony of
DW1, it can be concluded that DW1 merely brought forth the bank statements of the accused persons and did not serve any other purpose in the trial as his deposition was factual in nature.
39. DW2 brought the bank statement of the complainant from the period 01.04.2016 to 31.03.2022, which is Exhibit DW2/B (colly). Upon cross examination, the witness admitted the document relied by the complainant I.e Mark C-1 (colly), which is the automated debit advice challans generated by the bank after payment of tax from their bank digitally. Further, he admitted that the debit advice (Mark C-1) has been issued by their bank and it matches with the bank statement of the complainant (Ex. DW-2/B) that has been brought by him before the Court. Thus, DW2 instead of substantiating the defence of the accused has supported the version of the complainant by conferring credence to the Debit notes and challans relied by the complainant as Mark C(colly) by corroborating them with the bank statement of the Complainant (Exhibit DW2/B) brought by him.
40. Further, deposition of DW3 and DW4 with respect to the present case, holds no water qua the facts of the present case as both DW3 and DW4 have stated facts with respect to a separate criminal complaint filed by the complainant before a different Court which is unconnected to the facts of the present case and hence have no bearing upon the adjudication of the present case.
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41. Ergo, in view of the discussion above, the accused have failed to bring on record any evidence to prove their version and it is clearly discernable that the accused persons have failed to rebut the presumption raised u/s 139 r/w 118 of NI Act. Thus, there exists no dispute regarding the amount due or enforceable debt of the accused no.4 and that the impugned cheque was issued to discharge a legally enforceable debt; and the second ingredient of the offence u/s138 stands proved.
d) Whether accused no. 1, 2 & 3 were incharge of the affairs of accused no.1 in terms of Section 141 of NI Act?
42. Since, it has already been determined that offence u/s 138 is made out/ proved against accused no.4; now I shall proceed to decide whether accused no.1, 2 & 3 were incharge of the affairs of accused no.1 at the time when offence was committed.
43. Section 141 NI Act provides that if drawer of cheque is a company, every person in charge and responsible for the conduct of the business of the company, at the time when offence was committed, will be deemed to be liable for offence u/s 138 NI Act. Any director, Manager, secretary or other officer shall be liable if it is proved that offence was committed with his consent or connivance or due to negligence on his part. Such person can plead in defence that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of offence.
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44. With respect to the deeming fiction raised by Sec. 141 of the Negotiable Instruments Act, the Hon'ble apex court while answering a reference in S.M.S. Pharmaceuticals Ltd Vs Neeta Bhalla and Anr, (2005) 8 SCC 89 has observed as follows:
"While analysing Sec.141 of the Act, it will be seen that it operates in cases where an offence under Sec.138 is committed by a company. The key words which occur in the Section are "every person". These are general words and take every person connected with a company within their sweep. Therefore, these words have been rightly qualified by use of the words "who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence etc." What is required is that the persons who are sought to be made criminally liable under Sec.141 should be at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the provision. It is only those persons who were in charge of and responsible for conduct of business of the company at the time of commission of an offence, who will be liable for criminal action. It follows from this that if a director of a Company who was not in charge of and was not responsible for the conduct of the business of the company at the relevant time, will not be liable under the provision. The liability arises from being in charge of and responsible for conduct of business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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office in a company. Conversely, a person not holding any office or designation in a Company may be liable if he satisfies the main requirement of being in charge of and responsible for conduct of business of a Company at the relevant time. Liability depends on the role one plays in the affairs of a Company and not on designation or status. If being a Director or Manager or Secretary was enough to cast criminal liability, the Section would have said so. Instead of "every person" the section would have said "every Director, Manager or Secretary in a Company is liable"..etc. The legislature is aware that it is a case of criminal liability which means serious consequences so far as the person sought to be made liable is concerned. Therefore, only persons who can be said to be connected with the commission of a crime at the relevant time have been subjected to action. A reference to subsection (2) of Sec.141 fortifies the above reasoning because subsection (2) envisages direct involvement of any Director, Manager, Secretary or other officer of a company in commission of an offence. This section operates when in a trial it is proved that the offence has been committed with the consent or connivance or is attributable to neglect on the part of any of the holders of these offices in a company. In such a case, such persons are to be held liable. Provision has been made for Directors, Managers, Secretaries and other officers of a company to cover them in cases of their proved involvement.
The conclusion is inevitable that the liability arises on account of conduct ,act or omission on the part of a person and not merely on account of holding an office or a position in a company. Therefore, in order to bring CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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a case within Sec.141 of the Act the complaint must disclose the necessary facts which make a person liable."
45. The only onus upon the complainant is to make specific averments in the complaint so as to make the main accused no. 4 liable and make 1 & 3 vicariously liable. For fastening the criminal liability, there is no legal requirement for the complainant to show that the accused partner of the firm was aware about each and every transaction. The complainant is supposed to know only generally as to who were in charge of the affairs of the company or firm, as the case may be. The other administrative matters would be within the special knowledge of the company or the firm and those who are in charge of it. In such circumstances, the complainant is expected to allege that the persons named in the complaint are in charge of the affairs of the company/firm. Reliance is placed upon SP Mani &Mohan Dairy vs. Dr. Snehalatha Elangovan, 2022 SCC ONLINE SC 1238. In the present complaint the complainant has discharged his burden by alleging the same.
WITH RESPECT TO ACCUSED NO.1
46. In the case at hand, accused no. 1 has raised the issue during the Notice framing stage that she is a sleeping partner in accused no.4 and thereby she has no idea of the transaction in question as her husband i.e. accused no.3 is managing complete affairs of the firm i.e accused no.4.
47. The onus of proving the fact that she is a sleeping partner and unconnected with the affairs of the accused no.4 is upon accused no.1 CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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48. Perusal of the record shows that, Ex. DW1/ D she is the signatory to the other self-cheques produced in evidence by DW1, which depict that she was involved in the day today functioning of the firm. Further, perusal of the Clause 10 of the duly signed, attested, stamped and registered Partnership deed (Exhibit CW1/C) shows that it states that all the partners shall be actively engaged in the conducting of affairs of the business and receive remuneration and shares have been divided amongst all the partners accordingly.
49. Further, she has admitted her signatures upon the impugned cheque at the stage of framing of notice u/s251 and also in her statement u/s313. It is also noteworthy that accused no. 1 is also an attesting witness to the loan agreement Mark-D entered between the parties thereby she cannot claim to be alien to the alleged loan transaction.
50. It is pertinent to mention here that accused No. 1 has also not brought any document to substantiate the claim's that he was a sleeping partner in the firm and did not look after the financial affairs of the firm; despite admitting that she is a signatory, it can be safely concluded that nothing has been placed on the record to discharge the onus on the accused no.1 that she is a sleeping partner in the firm. Reliance is placed upon Suresh Jindal v. State , (2008) 154 DLT 588.
51. Hence, from the discussion above it becomes clear that accused has failed to prove that she was sleeping partner and consequently beyond the scope of Section 141 NI Act and not concerned with the transaction in question.
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52. Ergo, accused no.1 is convicted of offence u/s138 r/w 141 NI Act.
ITH RESPECT TO ACCUSED NO. 253. In the present case, since the inception accused no.2 has asserted that he is a sleeping partner in the firm and is not managing the affairs of the firm. The perusal of statement of CW-1 reflects a clear and categorical admission that he had filled the contents of the impugned cheque CW-1/F in front of accused no. 1 & 3 alone. The complainant has averred only to the extent that the consent of accused no.2 was taken before signing the impugned cheque CW-1/F, nothing to signify his express consent has been placed on record. Also, no specific averments have been made against accused no.2 in the Evidence affidavit Ex CW1/1, which is a mandatory requirement for fastening vicarious liability u/s
141.
54. Furthermore, there is no documentary proof on the record that reflects involvement in day to day affairs of the accused no.2 with respect to running affairs of accused no. 4. Also, he is a non-signatory to the impugned cheque CW-1/F.
55. The law with respect to Section 141 has been interpreted to be read as that every person connected with a partnership firm cannot be liable for infraction of cheque and for a criminal action under Section 138 NI Act. It is only those persons who were in charge of and responsible for the conduct of business of the company at the time of commission of an offence, who will be liable for criminal act. If a partner of a firm was not in charge of and not CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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responsible for the conduct of the business of the firm at the relevant time, he will not be liable under Section 138NI Act. The liability arises from being in charge of and responsible for the conduct of business of the company at the relevant time when the offence was committed and not on the basis of holding a status of partner in a firm.
56. In Pooja Ravinder Devidasani vs. State of Maharashtra and Another, (2014) 16 SCC 1, Hon'ble Supreme Court of India held, as under:
"17.....To fasten vicarious liability under Section 141 of the Act on a person, at the material time that person shall have been at the helm of affairs of the company, one who actively looks after the day-to-day activities of the company and is particularly responsible for the conduct of its business. Simply because a person is a Director of a company, does not make him liable under the NI Act. Every person connected with the Company will not fall into the ambit of the provision. Time and again, it has been asserted by this Court that only those persons who were in charge of and responsible for the conduct of the business of the Company at the time of commission of an offence will be liable for criminal action. A Director, who was not in charge of and was not responsible for the conduct of the business of the Company at the relevant time, will not be liable for an offence under Section 141 of the NI Act....."
57. Also the Hon'ble Supreme Court of India, in Dilip Hariramani vs. Bank of Baroda, 2022 SCC OnLine SC 579, has observed as follows:
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"9.....The expression 'every person' is wide and comprehensive enough to include a director, partner or other officers or persons. At the same time, it follows that a person who does not bear out the requirements of 'in charge of and responsible to the company for the conduct of its business' is not vicariously liable under Section 141 of the NI Act. The burden is on the prosecution to show that the person prosecuted was in charge of and responsible to the company for conduct of its business....."
58. Coming to the case at hand, accused no.2 is a attesting witness to the loan agreement Mark-D; however, the Hon'ble Supreme Court in the case of Dilip Hariramani vs Bank of Baroda; has categorically held that criminal liability for cheque bounce cases under Section 138 of the Negotiable Instruments Act (NI Act) cannot be fastened on a person merely because he was a partner at the firm that had taken the loan or that he stood as a guarantor for such a loan Thus, when the complainant could not substantiate thatccused no.2 was incharge of the affairs of accused no.4, when the offence was committed, merely being signatory to the loan document does not make accused no.2 vicariously liable for the loan taken by the firm.
59. Ergo, accused no.2 stands acquitted of the offence u/s138 r/w 141 of NI Act.
WITH RESPECT TO ACCUSED NO. 360. Perusal of the statements made by the accused No. 3 as well as accused no. 1 & 2 at the stage of framing of notice show that none is disputing that accused no.3 was managing the affairs of the accused no. 4. Further, the CC No. 961/22 Distt. - Shahdara Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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complainant has specifically averred the role of accused no. 1 & 3 being incharge of the affairs of accused no.4 and he has in his deposition corroborated the same showing that accused no.1 & 3 were incharge of the affairs of accused no.4, when the offence was committed. Both Accused no.1 & 3 has been proven to be the signatory to the impugned cheques by virtue of his statement u/s 251 and statement u/s 313 acting through accused no.4.
61. During the chief examination of the complainant, he has deposed that the GST approvals for the accused no.4 were taken from accused no.3, which has not been disputed by the accused.
62. Rest of the facts and evidence qua accused no.3 is on similar lines as accused no.1 and can be read accordingly. Thus, it can be concluded that accused no.3 falls within the ambit of Section 141 of NI Act
63. Ergo, accused no.3 is convicted of offence u/s 138 r/w 141 NI Act.
CONCLUSION:
64. The primary onus on the accused no.4 was to rebut the presumptions raised under Section 118(a) and section 139 of NI Act. The standard of proof required by the accused to discharge his burden is of preponderance of probabilities by bringing on record direct evidence or circumstances; and he has failed to discharge the same. Furthermore, the burden upon accused no.1,2 & 3 was to show that they were not incharge of the affairs of the accused no.1 when the offence was committed; and accused no.1 &3 have failed to raise a probable defence to deny the same; however, accused no.2 has been able to do the same.
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65. To recapitulate the above discussion, the complainant has been success- ful in establishing his case beyond reasonable doubt with the aid of presump- tions of law raised in his favor under section 118 and 139 of the NI Act, by bringing cogent evidence and by withstanding the test of cross examination to punch the holes in the case of the complainant and making the case of the com- plainant doubtful. In the result of the analysis of the present case, the accused no. 4 Tharun VAC ,is hereby convicted of the offence punishable under Section 138, Negotiable Instruments Act, 1881. Further, accused no.1 & 3 being a sig- natory to the impugned cheques along being the officers incharge of accused no.4 are hereby convicted of offence punishable under section 138 read with section 141 of Negotiable Instruments Act, 1881. Whereas, accused no.2 is aquitted from the charge of offence under section 138 read with section 141 of NI Act.
66. This judgment contains 29 pages. This judgment has been signed and pronounced by the undersigned in open court.
67. Let a copy of the judgment be uploaded on the official website of District Courts, Karkardooma forthwith.
Announced in the open (ANMOL NOHRIA)
Court on 02.12.2024 JMFC-02/NE/KKD COURTS
CC No. 961/22
Distt. - Shahdara
Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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CC No. 961/22
Distt. - Shahdara
Girish Chandra Upadhyay vs. Elizabeth Thankachen & Ors.
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