Delhi District Court
Shubhashish Sarkar vs . Dri Distributors And Developers Pvt. ... on 18 March, 2023
IN THE COURT OF MS. ANAM RAIS KHAN,
METROPOLITAN MAGISTRATE -01 (NI ACT),
NEW DELHI DISTRICT, RACC, NEW DELHI
1. Complaint Case : 5873/2020
number DLND020079092020
2. Name & address of the : Shubhashish Sarkar
complainant S/o Sagar Kumar Sarkar,
R/o 9033, ATS One Hamlet, Janpath, Sector 104, Noida, UP-201304.
3. Name and address : 1. M/s GRJ Distributors & Developers Pvt Ltd.
of the accused persons Having registered office at :-
64, Scindia House, Connaught Place, New Delhi- 110001.
2nd address :- 9th Floor, SAS Tower, Near Medicity, Sector 38, Gurugram, Haryana-122001.
2. M/s Avalon Projects A unit of M/s GRJ Distributors & Developers Pvt Ltd.
2nd Floor, Tower B, IRIS Tech Park, Sohna Road, Gurugram, Haryana-122001.
2nd address :- 9th Floor, SAS Tower, Near Medicity, Sector 38, Gurugram, Haryana-122001.
3. Ajay Kumar Gupta S/o Anand Swaroop Gupta, R/o D-2, Pushpanjali Enclave, Pitampura, North West, Delhi-110034.
4. Ajay Singhal S/o R.K. Singal, R/o AR-502B, 2nd Floor, Golf Course Road, Aralias Sector 42, Gurugram, Haryana -122002.
4. Offence complained Section 138 read with Section 141, Negotiable : Instruments Act, 1881.
5. Plea of the guilt : All the accused persons pleaded not guilty.
6. Final Order qua Accused no. 1 : Convicted Accused no. 2 : Not Summoned Accused no. 3 : Convicted Accused no. 4 : Convicted
7. Date of institution : 29.07.2020
8. Date on which : 28.02.2023 reserved for judgment
9. Date of judgment : 18.03.2023 CC No.5873/2020 Page 1 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS BRIEF STATEMENT OF FACTS AND REASONS FOR THE DECISION
1. Vide this judgment, this court shall dispose of the aforementioned complaint case filed by the complainant namely Shubhashish Sarkar against the Accused no. 1 company, namely M/s GRJ Distributors & Developer Pvt Ltd., Accused no. 2 Avalon Projects and Directors of Accused no. 1 company i.e. Accused No. 3 Ajay Kumar Gupta and Accused no. 4 Ajay Kumar Singhal (hereinafter collectively referred to as the "accused persons") in respect of the dishonour of one cheque bearing no. 003803 dated 07.05.2020 for an amount of Rs. 39,85,909/- drawn on HDFC Bank, Shop No. 4-8, D Block, South City II, Commercial Shopping Center, Gurgaon-122018, Haryana (hereinafter referred to as the "Impugned Cheque").
2. Tersely put, it is the case of the Complainant that in the month of February, 2017 accused persons had approached him to invest in their project i.e. 'Avalon Rangoli' at Sector 24, Dharuhera whereby they offered for the sale of an apartment/ unit under a guaranteed buy back scheme and further assured him that he shall be required to pay only 65% of the basic cost of the unit and the balance on possession with an option to exit after 36 months. It is further alleged that upon the assurance of the accused persons that he will get a guaranteed return of Rs.39,85,909/- upon cancellation, the complainant invested Rs.27,38,736/- in their abovesaid project.
3. It is further the case of the complainant that an apartment buyer's agreement dated 27.03.2017 and a Memorandum of Understanding (hereinafter referred to as the 'MOU') dated 28.03.2017 was also executed between the parties.
CC No.5873/2020 Page 2 of 22SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS It is further alleged that the accused persons issued the impugned cheque for the amount of Rs.39,85,909/- towards the discharge of their abovesaid debt and liability towards the complainant. It is further the case of the complainant that vide his e-mails dated 23.09.2019 and 30.01.2020, he informed the accused persons to cancel the booked unit, however, no reply was received from them.
4. It is further the case of the complainant that after giving due intimation to the accused persons, he presented the impugned cheque, which upon presentation was dishonoured and was returned with the remarks 'joint signatures required' vide cheque return memo dated 12.05.2020. Upon the assurance of the accused persons, the impugned cheque was presented again for encashment on 08.06.2020, but it was returned unpaid with the same remarks vide cheque return memo dated 09.06.2020. Thereafter, the complainant sent a legal demand notice dated 29.06.2020 to the accused persons through speed post which was duly served upon them. Since the accused persons failed to pay the amount of the impugned cheque within the statutory period of 15 days from the receipt of legal demand notice, hence, the complainant has moved this court with the present complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the "NI Act").
5. In pre-summoning evidence, the complainant, namely Sh. Shubhashish Sarkar examined himself as CW-1 on affidavit being Ex.CW1/A and placed on record certain documents i.e. accused company master data being Ex.CW1/1, accused company signatory details being Ex.CW1/2, e-mail dated 07.02.2017 being Ex.CW1/3, copy of receipt dated CC No.5873/2020 Page 3 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS 16.02.2017 for an amount of Rs.2,00,000/- being Ex.CW1/4 (OSR), copy of receipt dated 27.03.2017 for an amount of Rs.25,38,736/- being Ex.CW1/5 (OSR), copy of apartment buyer agreement dated 27.03.2017 being Ex.CW1/6 (OSR), copy of allotment letter dated 27.03.2017 being Ex.CW1/7 (OSR), copy of MOU dated 28.03.2017 being Ex.CW1/8 (OSR), e-mail dated 23.09.2019 being Ex.CW1/9, e-mail dated 30.01.2020 being Ex.CW1/10, impugned cheque being Ex.CW1/11, email dated 08.05.2020 being Ex.CW1/12, cheque return memo dated 12.05.2020 being Ex.CW1/13, e-mail dated 13.05.2020 being Ex.CW1/14, e-mail dated 26.05.2020 being Ex.CW1/15, e-mail dated 01.06.2020 being Ex.CW1/16, e-mail dated 02.06.2020 being Ex.CW1/17, original cheque return memo dated 09.06.2020 being Ex.CW1/18, office copy of legal demand notice being Ex.CW1/19, original speed post receipts being Ex.CW1/20 (Colly), original courier receipts being Ex.CW1/21 (Colly), tracking reports of notices sent through speed post being Ex.CW1/22 (Colly) and tracking report for notices sent through courier being Ex.CW1/23 (Colly), e-mail dated 22.07.2020 being Mark A, reply to the legal demand notice dated 17.07.2020 sent by the accused being Ex.CW1/24, original envelope of the reply dated 17.07.2020 being Ex.CW1/25 & tracking report for the service of reply dated 17.07.2020 through courier being Ex.CW1/26.
6. Upon prima facie consideration of the pre- summoning evidence, the accused no. 1 company and accused no. 3 and 4, being its directors, were summoned vide order dated 04.01.2021. Summons were not issued to accused No.2.
7. Upon appearance of the accused persons, separate CC No.5873/2020 Page 4 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS notices under Section 251, Cr.P.C. were served upon the AR of Accused no. 1 and Accused no. 3 and 4 on 03.11.2022 to which they pleaded not guilty. Accused No. 3 admitted his signatures on the impugned cheque, however, Accused no.4 denied the same. Accused no. 3 and 4 admitted the receipt of the legal demand notice, and AR of the Accused no. 1 company admitted the address of the said company mentioned therein.
8. The complainant adopted his pre-summoning evidence as post-summoning evidence. After an oral application under Section 145(2) NI Act moved on behalf of the accused persons was allowed vide order dated 03.11.2022, the complainant was re-called for his cross examination.
9. The complainant was duly cross examined by Ld. Counsel for the accused persons. Complainant evidence was closed vide order and separate statement of the complainant dated 20.12.2022.
10. Separate statements of accused persons under Section 313 read with Section 281 Cr.P.C were recorded on 18.01.2023, whereby the entire incriminating evidence was put to them.
11. At this stage, the AR of Accused no. 1 company stated that the impugned cheque belongs to accused no.1 company and was issued as a security cheque in favour of the complainant against the flat which had to be constructed by said company within 35-36 months. He further stated that the MOU had a condition of buying back the property but the complainant failed to exercise the said option and presented the impugned cheque prematurely and hence, he denied any liability towards the complainant. He admitted documents i.e. Ex.CW1/1, CC No.5873/2020 Page 5 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS Ex.CW1/2, Ex.CW1/4 (OSR), Ex.CW1/5 (OSR), Ex.CW1/6 (OSR), Ex.CW1/7 (OSR), Ex.CW1/8 (OSR), Ex.CW1/9 (OSR), Ex.CW1/11, Ex.CW1/13, Ex.CW1/16, Ex.CW1/18, legal demand notice i.e. Ex.CW1/24, Mark A and Ex.CW1/26.
12. Accused no. 3 and 4 also admitted that the impugned cheque belongs to accused no.1 company and accused no.3 additionally also admitted his signatures therein in the capacity of its director/ authorized signatory. They stated that they were responsible to the accused no.1 company for the conduct of its affairs as on the date of the issuance of the impugned cheque. They also reiterated the defence raised by AR of accused no.1 company and admitted all the documents admitted by the AR of accused no.1 company mentioned hereinabove.
13. Since the accused persons chose not to lead defence evidence, the matter was adjourned for final arguments.
14. Final arguments were addressed on behalf of both the parties on 13.02.2023. Written submissions were also filed on behalf of both the parties.
15. Rival submissions have been considered and record of the case as well as judgments relied upon by both the parties have been carefully perused.
16. Before delving into the facts of the present case, it is relevant to discuss the law applicable to the present proceedings. In the cases where the offence under Section 138 of the NI Act is allegedly committed by a company, subsection (1) of Section 141, NI Act provides for the vicarious liability of every person who, at the time of offence was committed, was in charge of and was responsible to the company for the conduct of its business, CC No.5873/2020 Page 6 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS exception being when such person proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence. Further, subsection (2) of the Section provides that notwithstanding anything contained in subsection (1), where any offence under NI Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
17. Since in the case at hand, the liability has been primarily imputed to the accused no. 1 company under Section 138 NI Act being the drawer of the impugned cheque and vicariously upon the other accused persons by virtue of their position as its directors at the time of issuance and presentation of the impugned cheque in terms of Section 141 NI Act, at the very outset, it becomes imperative to first scrutinize whether the accused no. 1 company can be held liable for the alleged offence under Section 138 NI Act, if any, committed by it.
18. To bring home a liability under Section 138 of the NI Act, following elements must spring out from the averments in the complaint and the evidence adduced by the complainant, which are:
"a. The accused issued a cheque on an account maintained by him with a bank.
b. The said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability, which is legally enforceable.CC No.5873/2020 Page 7 of 22
SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS c. The said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
d. The aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured. e. The payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
f. The drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand."
19. Once the other ingredients mentioned in the foregoing paragraph are established by the complainant, then as soon as the execution of impugned cheque is admitted by the accused, a factual base is established to invoke the presumption of cheque having been issued in discharge, in whole or in part, of any debt or other liability by virtue of Section 118(a) read with Section 139 of NI Act. This is a reverse onus clause, which means that unless the contrary is proved, it shall be presumed that the impugned cheque was drawn by the accused for a consideration and that the complainant had received it in discharge of a debt/ liability from the accused. In the case titled as Bir Singh Vs. Mukesh Kumar, (2019) 4 SCC 197, it was held by Hon'ble Supreme Court of India that once the accused has admitted the signatures on the cheque in question, then the court is bound to raise presumption under Section 139 NI Act.
20. It has been held by Hon'ble Supreme Court of India in the judgment titled Rangappa vs. Sri Mohan, (2010) 11 SCC 441 that a reverse onus clause usually imposes an evidentiary burden and not a persuasive burden and when an accused has to CC No.5873/2020 Page 8 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. It was further held that the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
21. In the present case, in order to discharge his initial burden to prove the above mentioned ingredients, complainant relied upon his complaint, his own evidence affidavit being Ex.CW1/A and placed on record several documents being Ex.CW1/1 to Ex.CW1/26. Ld. Counsel for the complainant submitted that the accused no. 3 has already admitted his signatures on the impugned cheque and hence presumption of the impugned cheque having been issued in discharge of debt or other liability arises in favour of the complainant in terms of Section 118(a) read with Section 139 of NI Act against the accused no. 1 company, being the drawer of the impugned cheque, as well as against the accused no. 3 and 4 being its directors. He further argued that genuineness of the impugned cheque, bank return memo, legal demand notice and postal receipts as well as the address of the accused no. 1 company on the legal demand notice was not disputed by the accused persons at any stage of the trial. He argued that the fact that the complainant received no payment within 15 days of the service of the legal demand notice coupled with the documentary proof brought on record, duly establishes all the ingredients of the CC No.5873/2020 Page 9 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS offence under Section 138 NI Act. He thus submitted that since all the ingredients laid down under Section 138 NI Act are fulfilled, the accused no. 1 company should be convicted of the offence of dishonour of the impugned cheque.
22. In the case at hand, since the complainant has discharged his initial burden on the basis of the documents mentioned hereinbefore, all the other ingredients of the offence under Section 138 of the NI Act stand successfully established. Further, since the accused no. 3 has admitted his signatures on the impugned cheque in the capacity of Director of accused no. 1 company and its AR has also admitted the fact of issuance of the same from the account of the said company, thus, the presumptions under Sections 118(a) and 139 of the NI Act arise against the accused no. 1 company with respect to the existence of legally enforceable debt/liability in favour of the complainant. The onus is now upon the accused no. 1 company to rebut the mandatory presumptions under the NI Act by raising a probable defence to show that the impugned cheque was not issued in discharge of a debt/liability.
23. Defence of the accused persons is broadly two fold:
Firstly, that there is no legally enforceable debt or liability to the tune of the amount of the impugned cheque that ever accrued in favour of the complainant and against the accused no. 1 company as on the date of its drawal or presentation. Secondly, it is the defence of accused no. 3 and 4, that since no offence under Section 138 NI Act is made out against accused no. 1 company, hence they can not be held vicariously liable for the said offence.CC No.5873/2020 Page 10 of 22
SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS DEFENCE OF NON EXISTENCE OF A LEGALLY ENFORCEABLE DEBT/LIABILITY AGAINST ACCUSED NO. 1 COMPANY.
24. In order to rebut the mandatory presumptions, the primary defence taken on behalf of the accused no. 1 company is that there is no legally enforceable debt or liability in favour of the complainant and against the accused no. 1 company to the tune of the amount mentioned in the impugned cheque either on the date of its drawal or its presentation on the ground that the complainant exercised the buy back option pre-maturely vide e- mail dated 23.09.2019 i.e. Ex. CW1/9, way prior to the Buy Back Period and hence, he was not entitled to the enhanced Buy Back option as envisaged under clause 3 of the MOU i.e Ex. CW1/8 (OSR) (Colly) and the e-mail dated 30.01.2020 i.e. Ex. CW1/10 is of no consequence as the buy-back option had already lapsed.
25. Ld. Counsel for the accused persons submitted that in terms of the MOU i.e. Ex. CW1/8 (OSR) (Colly), the complainant had paid a total sum of Rs.27,38,736/- i.e. 65% of the BSP towards the purchase of a unit and was required to pay the remaining 35% at the time of possession. He argued that in terms of clause 3 of Ex. CW1/8 (OSR) (Colly), the Complainant had a buy back option which could have been exercised at the commencement of the 35th month, but before the commencement of 36th month from the date of Ex. CW1/8 (OSR) (Colly) i.e. between 27.01.2020 and 27.02.2020 (hereinafter referred to as "Buy Back Period"). He further submitted that in case the complainant exercised the said buy back option in terms of the clause 3 and 4 of the said MOU and the same was accepted by the accused no.1 company, the complainant would be entitled to CC No.5873/2020 Page 11 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS an appreciation of Rs. 13,65,109/- in addition to the principal amount paid at the time of booking the said unit. It is in this context, that the accused no.1 company had issued the impugned post-dated cheque amounting to Rs. 39,85,909 [65% of the BSP + appreciation of Rs. 13,65,109] in favour of the complainant as a security cheque. He argued that since admittedly the complainant exercised the said buy back option pre-maturely through his e-mail dated 23.09.2019 i.e. Ex. CW1/9, way prior to the Buy Back Period hence, he was not entitled to the enhanced buyback option as envisaged under Ex. CW1/8 (OSR) (Colly). He submitted that since the complainant had not exercised the said buy back option as per the terms of Ex. CW1/8 (OSR) (Colly), the said buy back option lapsed and was no more available to the complainant in terms of Clause 4 of Ex. CW1/8 (OSR) (Colly).
26. It was further argued on behalf of the accused persons that assuming, but not admitting, that if the buy back option was exercised within the aforesaid Buy-Back Period, even then as per Clause 4 of Ex. CW1/8 (OSR) (Colly), in case of dishonor of the impugned cheque, it was agreed between the parties that the accused no.1 company would be liable to hand over the said unit at the amount already paid by the complainant i.e. 65% BSP and no extra charge will be levied by the accused no.1 company. It was hence argued that owing to the foregoing reasons, no legal debt or liability ever accrued in favour of the complainant and against the accused no.1 company and hence the accused persons are entitled to be acquitted.
27. Ld. Counsel for the accused persons relied upon the decision of Hon'ble Supreme Court in a recent case titled CC No.5873/2020 Page 12 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS Dashrathbhai Trikambhai Patel Vs. Hitesh Mahendrabhai Patel, (2023) 1 SCC 578 to show that if there has been a material change in the circumstance such that the sum in the cheque does not represent a legally enforceable debt at the time of maturity or encashment, then the offence under Section 138 is not made out.
28. Per contra, Ld. Counsel for the complainant argued that it is an admitted position that the 35 th month commences from 27.01.2020 and ends on 27.02.2020 and the factual position that e-mail dated 30.01.2020 i.e. Ex. CW1/10 sent by the complainant has been received by the accused persons is also an admitted position. He argued that the plain reading of clause 3 of Ex. CW1/8 (OSR) (Colly) does not in any way state in unequivocal terms that in case of pre-mature cancellation, the right of the complainant to cancel the allotment subsequently as per the procedure provided in the said MOU shall stand lapsed. He further submitted that the accused persons have failed to prove that the cancellation of the unit made by the complainant vide e-mail dated 30.01.2020 i.e. Ex. CW1/10 is de hors the contract between the parties. Thus, he argued that the cancellation of the unit under clause 3 of Ex. CW1/8 (OSR) (Colly) was validly made by the complainant vide its e-mail dated 30.01.2020 i.e. Ex. CW1/10 and the accused persons are legally bound to discharge their obligation to pay the amount of the impugned cheque.
29. Ld. Counsel for the complainant relied upon the judgment of Hon'ble Apex court in Transmission Corporation of Andhra Pradesh Ltd. & Ors. Vs. GMR Vemagiri Power Generation Limited & Anr. 2018 (3) SCC 716 in support of his contention that a contract has to be interpreted in accordance CC No.5873/2020 Page 13 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS with the language used, with reference to the context in which it came to be prepared and a technical view of an agreement, torn out of context, cannot be taken to reinterpret the agreement and arrive at a new finding with regard to the intendment of the parties by including something which was never intended to be included, to the prejudice of a party to the contract, while giving an undue advantage to the other.
30. Moving on, Ld. Counsel for the complainant further argued that the second leg of the defence raised by the accused persons that if the buyback option is exercised by the complainant as contemplated, even then the accused persons are not liable to pay the amount of the impugned cheque as they shall only be liable to hand over the unit at the amount already paid by him, is also completely misplaced, and flawed. He argued that under Clause 3 of Ex. CW1/8 (OSR) (Colly), a categorical right is given to the complainant which reads as follows:
"It is on the sole discretion of the customer to exercise the option of Assured exit with the agreed returns or ...".
31. He argued that the above said right cannot be taken away by the accused persons as the complainant has acted upon the clear understanding that they shall make the payment in case he exercises his option to cancel the Unit in the 35 th month from the date of MOU i.e. Ex. CW1/8 (OSR) (Colly) and further that the accused persons have also issued the impugned cheque in pursuance of the said understanding.
32. Ld. Counsel for the complainant drew the attention of this court to the last five lines of Clause 4 of Ex. CW1/8 (OSR) (Colly) and argued that this clause is in complete CC No.5873/2020 Page 14 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS contradiction with the earlier clauses contained in clause 3 and 4 and is ambiguous, unreasonable and inequitable as it does not explain as to why in the first place the accused persons have issued the impugned cheque if eventually the cheque is not to be encashed. He argued that the said part of the clause clearly contradicts the other express terms of the contract, and it takes away business efficacy of the contract. He further submitted that if, in fact, there is a conflict between the earlier clause and the later clause and it is not possible to give effect to all of them, then the rule of construction is well established that it is the earlier clause that must override the later clause and not vice versa. He placed reliance on the judgment of Hon'ble Supreme Court in a case titled as Radha Sundar Dutta Vs. Mohd. Jahadur Rahim & Ors. reported in 1959 SCR 1309.
33. He lastly submitted that since the accused persons have clearly failed to rebut the mandatory presumptions that exist in favor of the complainant, hence they should be convicted.
34. After a careful perusal of the record and patiently hearing the Ld. Counsels for both the parties, the following points of determination arise for the consideration of this court:
a. Whether e-mail dated 23.09.2019 i.e. Ex. CW1/9 sent by the complainant to the accused persons amounts to a premature cancellation and surrender of the unit which violates Clause 3 of the MOU i.e Ex. CW1/8 (OSR) (Colly) rendering the e-mail dated 30.01.2020 i.e. Ex.
CW1/10 of no consequence as the buy-back option had already lapsed.
CC No.5873/2020 Page 15 of 22SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS b. Whether in case of a valid exercise of the option to cancel the unit within the agreed timeline, accused no. 1 company is liable to pay the amount of the impugned cheque to the complainant.
35. Before progressing further, it is quintessential to reproduce the 3rd and 4th clause of Ex. CW1/8 (OSR) (Colly) and the contents of e-mails dated 23.09.2019 and 30.01.2020 i.e. Ex. CW1/9 and Ex. CW1/10 which are as follows:-
"Clause 3. In case the Allottee wishes to cancel the Allotment and surrender the Apartment, then he/ she can do so at the start of 35th month (Thirty Fifth) month, but, before the commencement of 36th (Thirty sixth month) from the date of this MOU (Buy-back Date) and the Company agrees to accept the cancellation and surrender of the Apartment and agrees to pay an appreciation on Super Area of said Apartment amounting to Rs.1365109 (Rupees Thirteen lakh sixty five thousand one hundred and nine only) in addition to the principal amounts paid by Allottee as stated in Clause 2 above.
Subsequently, it is agreed that on the completion of the agreed transaction the client/ customer will be handed over a Post dated cheque of the Total Amount payable after 36 months. It is on the sole discretion of the customer to exercise the option of Assured exit with the agreed returns or to take up the unit paying the balance of 35% of Basic Selling price of Rs 2400 psft PLUS Agreed Charges as mentioned in annexure within 45 days wherein the Agreed. To clarify, in case the customer plans to proceed/ not to opt for a buy back option he / she would not be paid the agreed buy back amount rather the amount paid ONLY will be considered.
In case the developer exercise the option of paying back the customer after 12 months from the date of booking the invested amount with the agreed CAGR of 15% annually on Pro-rata basis.
CC No.5873/2020 Page 16 of 22SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS Clause 4. "In case the Allottee exercises the option of cancellation of Allotment and surrender of Apartment, then the Allottee shall inform the company before expiry of 35th month (Thirty fifth) month from the Date of MOU of his intention to surrender the Apartment. The customer needs to register the cancellation request on the Specified Avalon Email id [email protected]; [email protected]; [email protected]; which would be the mutual basis of consideration for Buy back/ retention of the apartment. The Purchaser/ Investor will execute the necessary documents to surrender the allotted units in favor of the Company/ Developer upon receipt of payment. The Purchaser/Investor shall execute such necessary deeds, documents in favor of Company/Developer for the surrender of the said Apartment by the Purchaser/Investor to Company/Developer and the payment of repurchase price is subject to applicable tax laws. Post 36 months the Company/developer would be given a time frame of 45 days to return the prescribed committed amount to the client/ investor in case the client/investor has agreed to exercise the buyback option (refer Clause 3). This option to cancel the Allotment and surrender the Apartment shall lapse if it is not exercised in the manner given above. The non-adherence of the buy- back agreement is agreed to be liable in the court of law. Further, in case of non-adherence to the Buy-back offering post the expiry of agreed timeline or in the event of a post dated cheque dishonor, the Company/Developer is liable to transfer the apartment at 65% of Basic Selling Prince which is Rs.2400 sqft plus applicable stamp duty and further no extra charge will charged to the customer."
Ex. CW1/9:
"Dear Team, I am writing this mail to inform all concerned that I would want to execute Cancellation of Unit held under Avalon Rangoli, Sec-24, Dharuhera, Haryana, Daruhera Project vide Tower B2, Unit No
903. I hold the PDC cheque dated 7th May 2020 of amount CC No.5873/2020 Page 17 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS INR 39,85,909.00 (Thirty Nine Lacs Eighty Five Thousand Nine Hundred and Nine only) inclusive of appreciation as per initial application signed. Kindly do the needful to arrange for cancellation of the UNIT held under my name along with any other formalities required to be executed."
Ex. CW1/10:
"Hello all.
This is a follow up to my earlier email dated 23 Sept 2019, wherein I had clearly expressed my desire to cancel UNIT 903, Tower B2, Avalon Rangoli. Please also treat this a reminder of the due date for the PDC of value INR 39,85,909.00 (THIRTY NINE LACS EIGHTY FIVE THOUSAND NINE HUNDRED AND NINE ONLY), dated May 7 2020, that I intend to present at the bank on due course. Since I had not received any response from you on the original mail, I take it there are no other formalities required at my end pending presentation of said PDC."
36. With respect to the first point, it is apparent that the e-mail i.e. Ex. CW1/9 was sent on 23.09.2019 which is clearly prior to the agreed timeline in which the buy back option could have been exercised by the complainant. However, a careful perusal of the Ex. CW1/9 would reveal that, in essence and spirit, the said e-mail is not an exercise of buy-back option by the complainant, but merely an expression of his intention to do so. Complainant through his e-mail dated 23.09.2019 i.e. Ex. CW1/9 has informed the accused no. 1 company that he 'would want to execute the cancellation of the unit' and not that he is 'hereby canceling and surrendering the unit'. This is in consonance with Clause 4 of the MOU i.e. Ex. CW1/8 (OSR) (Colly) which requires that in case the allottee exercises the option of cancellation of Allotment and Surrender of Apartment, then CC No.5873/2020 Page 18 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS Allottee 'shall inform the company before the expiry of 35th month from the date of MOU of his intention to surrender the Apartment.' It is important to note that a conjoint reading of 3 rd and 4th clauses of MOU i.e. Ex. CW1/8 (OSR) (Colly) would reveal that the allottee is expected to express his intention anytime before the expiry of 35 th month and the cancellation has to be effected within the period ranging from the start of 35 th month but before the commencement of 36 th month from the date of the said MOU.
37. In the case at hand, the complainant has clearly expressed his intention to cancel the unit through e-mail dated 23.09.2019 i.e. Ex. CW1/9 in terms of clause 4 of Ex. CW1/8 (OSR) (Colly). Thereafter in the follow up e-mail dated 30.01.2020 i.e. Ex. CW1/10 which falls within the agreed timeline as per Clause 3 of CW1/8 (OSR) (Colly), the complainant has effectively canceled the unit and informed the accused no. 1 company that he shall present the impugned cheque for encashment.
38. Hence, this court has no hesitation to hold that the complainant, by expressing his 'intention to cancel the unit' vide his e-mail dated 23.09.2019 i.e. Ex. CW1/9 in terms of clause 4 of CW1/8 (OSR) (Colly), has thereafter validly exercised the option of cancellation of the unit within the agreed timeline as per clause 3 of CW1/8 (OSR) (Colly) vide his e-mail dated 30.01.2020 i.e. Ex. CW1/10. The defence of the accused persons that the option to cancel the unit was exercised 'prematurely' by the complainant, is utterly flawed and is merely an attempt to mould the terms of CW1/8 (OSR) (Colly) in their own favour.
CC No.5873/2020 Page 19 of 22SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS
39. Moving to the second leg of defence raised by the accused persons that if the option to cancel the unit is exercised by the complainant as contemplated, even then the accused persons are not liable to pay the amount of the impugned cheque as they shall only be liable to hand over the unit at the amount already paid by him in terms of Clause 4 of CW1/8 (OSR) (Colly), I am afraid that this contention cannot be accepted on more counts than one.
40. Firstly, if in case of dishonour of the impugned cheque, the only remedy available with the complainant would have been to accept the possession of the unit at the amount already paid, then essentially there was never a discretion vested with him as envisaged in CW1/8 (OSR) (Colly) to opt for cancellation of unit and claim the 'assured return' as promised. This court is unable to comprehend that, if this is the import of the agreement between the parties, then what was the requirement of issuance of the impugned cheque if the accused persons could have easily reversed the option of cancellation of unit by dishonoring the said cheque and compelling the complainant to accept nothing but the unit at the amount already paid. This court would have even considered this contention of the accused persons, had they offered the possession of the unit canceled at the amount already paid, but astonishingly after the dishonour of the impugned cheque, the accused persons vide their admitted e-mail dated 01.06.2020 i.e. Ex. CW1/16 demanded the balance payment from the complainant before handing over the possession of the unit.
41. If all the contentions of the accused persons are CC No.5873/2020 Page 20 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS taken to be true, the MOU i.e. CW1/8 (OSR) (Colly) executed between the parties appears to be nothing but accused persons telling the complainant that they shall be tossing a coin. Heads they win, tails he loses. Crux of the matter is that accused persons can not have the cake and eat it all and in the event of the dishonor of the impugned cheque, they can not be allowed to take advantage of their own wrong.
42. In view of the foregoing discussion, this court holds that since the accused no. 1 company failed to handover the possession of the unit to the complainant at the amount already received prior to the date of filing of the present complaint and in fact demanded the balance amount from the complainant vide its e-mail dated 01.06.2020 i.e. Ex. CW1/16, it is liable to pay the amount of the impugned cheque to the complainant. Consequently, the existence of legally enforceable debt or liability in favour of the complainant and against accused no. 1 company stands proved in terms of Sections 118 read with 139 of the NI Act.
43. Since it is an admitted position that accused no. 3 and 4 were responsible to the accused no. 1 company for the conduct of its affairs, in terms of Section 141 of the NI Act, they both are also vicariously held liable for the offence under Section 138 of the NI Act committed by the accused no. 1 company.
FINAL ORDER
44. In view of the aforesaid discussion, accused no.1 M/s GRJ Distributors & Developers Pvt Ltd, accused no. 3 Ajay Kumar Gupta and accused no. 4 Ajay Singhal are hereby CC No.5873/2020 Page 21 of 22 SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS convicted of the offence under Section 138 read with Section 141, Negotiable Instruments Act, 1881.
Announced in open (Anam Rais Khan) Court on 18.03.2023 MM(NI Act)-01/RACC/ND
This judgment contains 22 signed pages and each page has been signed by the Presiding Officer.
CC No.5873/2020 Page 22 of 22SHUBHASHISH SARKAR Vs. DRI DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND ORS