Delhi District Court
Cnr. Dlct020098892015 Beautex ... vs Chandel Advertising Page 1 Of 24 on 8 September, 2021
CC No. 530785/2016
CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 1 of 24
IN THE COURT OF SH. VISVESH, METROPOLITAN
MAGISTRATE, N.I. ACT-06, CENTRAL, TIS
HAZARI COURTS, DELHI
CNR DLCT020098892015
CC No. 530785/2016
Beautex Advertising Media
A unit of Beautex Communication Pvt. Ltd.
Having its office at Vardan, 17-A
Second Floor, 38-39, WEA, Ajmal Khan Road
New Delhi- 110005
Through its Authorized Person
Sh. Anil Gupta ...... Complainant
Vs.
1. M/s Chandel Advertising Pvt. Ltd.
G-27/64-65, Sector-3, Rohini,
Near Sant Giri Public School
Delhi -110085
2. Mr. Alok Aggarwal (Director)
G-27/64-65, Sector-3, Rohini,
Near Sant Giri Public School
Page 1 of 24
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CC No. 530785/2016
CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 2 of 24
Delhi -110085
Also, at:
26/18, East Patel Nagar,
New Delhi -110008
3. Mrs. Renu Chandel (Director)
G-27/64-65, Sector-3, Rohini,
Near Sant Giri Public School
Delhi -110085
Also, at:
B-5 - 263, Sector- 3, Rohini
New Delhi -110085 ...... Accused Persons
Date of Institution : 14.09.2015
Offence complained of : s.138 of The Negotiable Instruments
Act,1881
Plea of the Accused : Not Guilty
Final Order : Accused No. 1, 2 & 3 all acquitted
Date of Decision : 08.09.2021
JUDGEMENT
1. The present Complaint has been filed by the Complainant against the Accused under section 138 Negotiable Instruments Act, 1881.
Factual Matrix
2. The brief facts as alleged by the Complainant in the Complaint are that the accused persons are doing the business of advertisement, but since the complainant is an accredited agency, the accused persons had been getting the advertisements of their clients through the complainant. It has also been averred that the Accused No. 1 is a Page 2 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 3 of 24 company and is looked after by Accused No. 2 and Accused No. 3 in its day-to-day affairs. It has also been averred that the complainant had got published advertisement of the accused in different newspapers and against which respective bills were raised and the Accused persons had issued cheques bearing No. 852894, 852895 and 852890 dated 29.04.0215, 30.04.2015 and 30.04.2015 for a sum of Rs. 40615, Rs. 85507 and Rs. 876449 respectively and all drawn on Andhra Bank, Deepali Chowk Branch, New Delhi.
2.1 When the Complainant presented the said cheques, hereinafter referred to as the cheques in question through his banker Vijaya bank, Karol Bagh branch, the same were returned unpaid by the banker of the Accused vide returning memos dated 21.07.2015, 24.07.2015 and 24.07.2015 with the remarks "Funds Insufficient".
2.2 The Complainant thereafter issued a legal demand notice on 03.08.2015 through counsel calling upon the Accused to pay the said cheque amount within a period of 15 days from receipt thereof. The said notice was duly served upon the Accused and the Accused failed to pay the aforesaid cheque amount within the statutory period.
2.3 Hence, the present Complaint u/s 138 Negotiable Instrument Act 1881 (hereinafter the NI Act) was filed on 14.09.2015 by the Complainant, praying for the Accused to be summoned, tried, and punished for commission of the offence u/s 138 of the Negotiable Instruments Act, 1881. The Complainant has averred that the present Page 3 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 4 of 24 Complaint is within the period of limitation and falls within the territorial limits of this Court's jurisdiction; thus, being tenable at law.
Proceedings before the court
3. Pre-summoning Evidence: To prove a prima-facie case, the Complainant led pre-summoning evidence by way of affidavit Ex. CW-1/A wherein the Complainant has affirmed the facts stated in the instant Complaint.
4. Documentary Evidence: To prove the case, the Complainant has relied upon the following documents:
a) Certificate of incorporation of Beautex Communication Private Ltd. Ex. CW1/1.
b) True copy of board resolution dated 01.08.2015, Ex. CW1/2.
c) Invoices issued in favour of Accused, Ex. CW1/3 to Ex. CW1/5.
d) Original bearing No. 852894, 852895 and 852890 dated 29.04.0215, 30.04.2015 and 30.04.2015 for a sum of Rs.
40615, Rs. 85507 and Rs. 876449 respectively and all drawn on Andhra Bank, Deepali Chowk Branch, New Delhi, Ex. CW1/6 to Ex. CW1/8.
e) Original cheque return memos dated 21.07.2015, 24.07.2015 and 24.07.2015 Ex. CW-1/9 to Ex. CW1/11.
f) Office Copy of legal notice dated 03.08.2015 Ex. CW1/12.
g) Postal receipts, Track Report & returned envelop Ex. CW1/13 to Ex. CW1/22.
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h) Ledger account for the period 01.04.2014 to 31.03.2016, Ex. CW1/23.
5. Summoning of the Accused: On finding of a prima-facie case against the Accused, the Accused was summoned on 23.02.2016 where the Accused appeared before the court on 29.06.2016.
6. Framing of notice & plea of defence: Notice u/s 251 Cr.P.C. was framed against the Accused persons on 25.02.2017 to which they respectively pleaded not guilty and claimed trial. The plea of defence of the Accused No.1, 2 & 3 was recorded where the said Accused persons had stated that the Complainant company had filed 12 cases against the Accused company in which, sum payments have been made through RTGS and other modes against the dishonour cheques as alleged by the Accused company and the other hand, the Complainant company in a preplanned manner to extort more money had presented the cheques in question by one to another.
7. Evidence of the Complainant: After the framing of notice, the Accused was granted permission to cross-examine the Complainant. Thereafter, the Complainant was examined as CW-1, adopting the pre-summoning evidence as post-summoning evidence and was cross examined and discharged. No other witnesses were examined by the Complainant. Thereafter, Complainant evidence was closed, and the matter was listed for statement of the Accused u/s 313 Cr.P.C. r/w Section 281 Cr.P.C.
8. Statement of the Accused: Statement of the Accused was recorded Page 5 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 6 of 24 u/s 313 Cr.P.C. r/w Section 281 Cr.P.C on 14.11.2018 wherein all the incriminating circumstances appearing in evidence against the Accused were put to him to which the Accused No.1 & 2 stated that they were innocent. They also stated that the cheques in question were given as security to the Complainant and they were asked from time to time not to present the same for encashment but despite that the cheques were so presented. It was also stated that they have made payment in the form of RTGS and cash to Complainant against the cheques but the same has not been considered anywhere. Accused No. 3 stated that Accused No. 2 used to see the dealings of Delhi and she used to see the dealings of Kanpur and Mumbai in respect of Accused No. 1. It was also stated that the requisite payment against the cheques in question has been made to the Complainant by way of RTGS.
9. Defence Evidence: The Accused persons have examined DW-1 i.e., Accused No. 3 and DW-3 i.e., Sh. Rahul Upadhyay (DW-2 was dropped at the time of DE). Thereafter, a separate statement of the Accused to that effect was recorded and defence evidence was closed. The matter was then fixed for final arguments.
10.Final Arguments: Final arguments were advanced by both sides. I have heard the submissions of the Ld. Counsel for the Complainant as well as the Accused. I have also perused the record. Both sides have also furnished written submissions along with case law in support of their respective stance. The same have also been duly considered in this judgement.
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11.For the application of s.138 of the Negotiable Instruments Act, 1881, the following legal requirements must be satisfied from the averments in the Complaint as well as the evidence of the Complainant: -
(a) That a person has drawn a cheque, on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any legally enforceable debt or other liability;
(b) That the cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(c) That the cheque has been returned by the drawee bank unpaid, for the reason that the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by agreement made with that bank;
(d) That the payee or holder in due course has made a demand for payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid;
(e) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of receipt of the said notice;
11.1. The aforesaid legal requirements are cumulative in nature, i.e. only when all of the aforementioned ingredients are duly proved is the drawer of the cheque deemed to have committed an offence under s. 138 of the Negotiable Instruments Act.
Page 7 of 24Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 8 of 24 11.2. The provision of s.138 is buttressed by s.139 and s.118 of the Act.
s. 139 of the Act provides that the court shall presume, that the holder of a cheque received the cheque for the discharge, wholly or in part of any debt or other liability. s.118 of the Act provides inter alia that the court shall presume, until the contrary is proved, that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
11.3. What follows from the aforesaid is that the offence u/s 138 of the Negotiable Instruments Act operates on reverse onus of proof theory. The presumptions u/s 139 and s. 118 of the Act mandate the court to draw them, when a given set of facts are shown to exist. The same is evident by the peremptory language "Shall Presume"
used. However, the said presumptions are rebuttable in nature, i.e. it is open for the defence to disprove the same by establishing facts to the contrary.
11.4. In the case of Hiten P. Dalal v. Bratindranath Banerjee1, the Hon'ble Supreme Court had occasion to examine the confines of the presumption u/s 139 of the Act, wherein it held as follows:
"22. Because both Sections 138 and 139 (..) "introduce an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the Accused."
(Ibid. at p. 65, para 14.) (...) The obligation on the prosecution may be discharged with the help of 1 (2001) 6 SCC 16 Page 8 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 9 of 24 presumptions of law or fact unless the Accused adduces evidence showing the reasonable possibility of the non- existence of the presumed fact.
Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the "prudent man".
(...) in the case of a mandatory presumption, the burden resting on the Accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the Accused is reasonable and probable. It must further be shown that the explanation is a true one. ........ Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted". (emphasis supplied).
11.5. Also, in the case of Rangappa v. Sri Mohan2, it was held that:
"(..)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. (..)
28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an Accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities".
(...) As clarified in the citations, the Accused can rely on the materials submitted by the Complainant in order to 2 (2010) 11 SCC 441 Page 9 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 10 of 24 raise such a defence and it is conceivable that in some cases the Accused may not need to adduce evidence of his/her own(...)"(emphasis supplied) 11.6. With regard to the factors taken into account for rebutting the presumption u/s 139 read with s.118 of the Act, the judgement of Hon'ble Delhi High Court in V.S. Yadav v. Reena 3 assumes importance, wherein it was held that:
"Mere pleading not guilty and stating that the cheques were issued as security, would not amount to rebutting the presumption raised under Section 139 of N.I. Act. (...) The Accused, by cogent evidence, has to prove the circumstance under which cheques were issued". (emphasis supplied) Appreciation of evidence
12. Now I shall proceed to deal with the legal ingredients one by one and give my finding on whether the evidence on record satisfies the legal ingredient in question or not.
(a) That a person has drawn a cheque, on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any legally enforceable debt or other liability 12.1. This condition pertains to the issuance of the cheque itself. It is pertinent to note that the Accused No. 2, who appeared for himself and on account of Accused No. 1, in his statement u/s 313 r/w 281 Cr.P.C. has admitted issuance of the cheques in question. Further, the cheque has been drawn on the account of the Accused persons.
3CRL. A. No. 1136 Of 2010 Page 10 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 11 of 24 This leads to drawing of an inference u/s 139 read with s.118 of the Act, that the cheque was issued in discharge of a legally recoverable debt or other liability of the Accused persons. The Accused No. 3 has disputed the drawing of vicarious liability against her which shall be comprehensively dealt with in the succeeding paragraphs.
12.2. In the case of Bharat Barrel & Drum Mfg. Co. v. Amin Chand Pyarelal 4, it was held "12. (...) the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. (emphasis supplied)"
12.3. The presumption having been raised against the Accused persons, it falls upon them to rebut it. They have chosen so to do by cross- examining CW-1 and also by leading evidence of DW-1 & DW-3 in their defence.
12.4. The clouds of suspicion start to loom dark on the case of the 4 (1999) 3 SCC 35 Page 11 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 12 of 24 Complainant during the cross examination of CW - 1 itself, wherein on the one hand the said witness states that he has personal knowledge regarding the payments made by the Accused to the Complainant whereas on the other hand he admits that the said payments were not made in his presence . Further, CW - 1 agrees and thereafter pointedly states that the payment of ₹ 19,46,775 has been received by the Complainant by way of RTGS and NEFT after issuance of the cheques in question. In the same breath, CW - 1 deposes that the said payment was not against the bills forming subject matter of the instant Complaint. He also admits that the factum of payment of ₹ 10 lacs subsequent to the issuance of the cheques in question and before the filing of the present case has not been mentioned in the Complaint. CW - 1 thereafter states that the same has been duly shown in the statement of account and that the payment of ₹ 19,46,775 has been duly adjusted against the other dues of the Accused persons. Lastly, he states that apart from the total amount recoverable under the instant cases, a separate amount of ₹ 7 lakh is also due to the Complainant and for which the Complainant has taken no steps yet to recover the same.
12.5. As regards the ledger account for the period 01.04.2014 -
31.03.2016, Ex. CW1/23, objection has been taken by the defence on account of mode of proof. It is important to note that the said objection was taken when the document was first produced before the court during the commencement of cross-examination of CW -
1. Thereafter, the Complainant made no attempts to rectify the Page 12 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 13 of 24 defect in respect of non-production of a certificate u/s 65B of the Indian Evidence Act. At the time of final arguments, the learned counsel for the Complainant has relied upon the judgement of the Hon'ble Supreme Court titled Tomaso Bruno Vs. State of UP 5 to contend that the production of such certificate is not a precondition for admissibility of electronic evidence.
12.6. The position of law in respect of the requirement of s.65B certificate is no longer res integra. The decision of Hon'ble Supreme Court in Anvar P.V Vs. P.K. Basheer 6 held that s.65B of the Indian Evidence Act is a complete code and being a special provision, would prevail over the general provisions of that Act in respect of admissibility of secondary evidence. The abovesaid judgement was duly affirmed and clarified in the case of Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal 7 wherein it was held that certificate required under section 65B (4) is a condition precedent to admissibility of evidence by way of electronic record. s.65B(1) begins with a non-obstante clause, and then goes on to mention information contained in an electronic record produced by a computer, which is, by a deeming fiction, then made a "document". This deeming fiction only takes effect if the further conditions mentioned in the Section are satisfied in relation to both the information and the computer in question; and if such conditions are met, the "document" shall then be admissible in any 5 2015(7) SCC 178 6 (2014) 10 SCC 473 7 2020 SCC OnLine SC 571 Page 13 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 14 of 24 proceedings. The words "...without further proof or production of the original..." make it clear that once the deeming fiction is given effect by the fulfilment of the conditions mentioned in the Section, the "deemed document" now becomes admissible in evidence without further proof or production of the original as evidence of any contents of the original, or of any fact stated therein of which direct evidence would be admissible. It is also pertinent to mention that the judgement of Tomaso Bruno Vs. State of UP8 has been expressly overruled by the judgement of Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal 9.
12.7. The above discussion would make it crystal clear that requirement of certificate u/s 65B of the Indian Evidence Act is not a mere procedural requirement concerning the mode of proof. It is a strict legal requirement which is a precondition for admissibility of secondary evidence of information contained in an electronic record. Absent a certificate u/s 65B, the information contained in an electronic record would not fall within the definition of "document" under s.3 of that Act and would be inherently inadmissible as evidence. The only exception envisaged to this proposition is when the electronic record contained in the computer/device on which the original information is first stored, is itself is produced before the Court by the owner thereof who proves that the said computer/device is owned and/or operated by him. Further, an 8 2015(7) SCC 178 9 supra Page 14 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 15 of 24 objection to inherent admissibility could be taken at any stage, at final arguments or even in appeal as has been held in the case of R.V.E. Venkatachala Gounder Vs. Arulmigu Viswesaraswami 10. An objection in respect of inherent admissibility of evidence is also a matter which cannot be waived based on any express/implied admission made by the opposite side. There can be no estoppel against statute. An inherently inadmissible evidence remains as such unless the bar on its admissibility is removed or its defect is cured. The party producing evidence which is barred by any provision of law cannot be heard to say that the same be admitted in evidence and considered in its favour as the opposite party laid no objection at the time of its production.
12.8. It must also be borne in mind that denoting a document as Mark/Exhibit in the course of the trial is only for the purposes of identification. It cannot be said that merely because the document has been referred to as exhibit, its genuineness and admissibility is out of question. Admissibility of evidence must be determined having regard to compliance with the relevant provisions of law including the rules of evidence (Sudir Engineering Company vs Nitco Roadways Ltd 11 relied upon). Thus considered, Ex. CW1/23 being unaccompanied by the requisite certificate under section 65B of the Indian Evidence Act, is rendered inadmissible. Therefore, it cannot be looked into for the purposes of the case of the 10 AIR 2003 SC 4548.
111995 IIAD Delhi Page 15 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 16 of 24 Complainant.
12.9. The upshot of the above is that while CW - 1 admits that a payment of ₹ 19,46,775 has been received from the Accused persons after issuance of the cheques in question, he is not able to show as to how the amounts due under the instant cheques in question were adjusted against the subsequent payment of ₹ 19,46,775 admittedly made. He is also not able to show as to how the Accused persons remained liable despite the subsequent adjustment of payment of ₹ 19,46,775. All of the above renders the case of the Complainant doubtful.
12.10. The testimony of DW - 1 revolves around only around the averment that the Accused No.2 used to look after the work of the Accused company in Delhi whereas DW - 1 used to look after the work in Kanpur and Mumbai. DW - 1 has not been able to bring any material on record to rebut the case of the Complainant that she was in charge of and was responsible for the day-to-day affairs of the Accused company. The Form 32 of the Accused company annexed by the Complainant shows both of the Accused No.2 and 3 to be directors. There is also a specific averment in the Complaint that both the Accused persons are looking after the day-to-day affairs of the Accused No.1 company. Further, even if the testimony of DW - 1 is considered as a whole, she admitted her directorship along with Accused No. 2 and has not specifically denied that she had any role to play in the affairs of the Accused No.1 company. She has merely deposed that she did not look after the work of the office of the Accused company in Delhi. She has admitted that she looks after Page 16 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 17 of 24 the work of the Accused company in Mumbai and Kanpur. As such, it cannot be said that merely because a person is looking after one particular branch office of the company, he is deemed not to be liable in respect of an offence committed by the company as a whole, albeit a different branch offices involved. A company may have various different branch offices throughout the country but the directors and other key managerial personnel would continue to be liable despite the being not particularly nominated as in charge of a particular branch office. The above said position of law been recognised by s.141 of the NI Act itself, wherein it makes no distinction between branch offices of a company and instead deals with the body corporate as a whole. As a result, the contention of the defence that the Accused No.3 could not be fastened with vicarious liability deserves to be rejected.
12.11. DW - 3 does not seem to be of much help to the case of the defence.
While he has deposed that he had handed over a sum of ₹ 3 lakh which was due on behalf of the Accused persons to Mr Neeraj Jain (the director of Beautex Communications Private Limited) January
- February 2016, he is not able to particularize his deposition so as the same could be shown to have nexus with the transaction in the instant case. He deposes about various aspects regarding his dealings with the Complainant as well as the Accused. However, not much of his testimony appears to be relevant to the transaction forming part of the instant case. Further, he has admitted that he had received phone calls from Accused No.2 in connection with his Page 17 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 18 of 24 deposition in the instant case. Also, a large part of his testimony is vague, based on hearsay and not on personal knowledge and is dotted with many 'I cannot say' phrases. Overall, his testimony does not appear to be reliable and even if this court acts upon the assumption that it is reliable, it does not appear to be of much relevance to the instant case.
12.12. The next contention advanced from the side of the defence is that the Complaint has not been preferred by the payee or any person authorised by the payee. It has been stated that CW - 1 having no authority to file or prosecute the present Complaint, the Complainant is not maintainable. It has also been submitted that while the cheques in question have been issued in favour of Beautex Advertising Media, Complaint has been ostensibly filed by Beautex Communication Private Limited. Even the certified true copy of the board resolution Ex. CW1/2 has been issued in favour of the authorised person by Beautex Communication Private Limited, who is not the payee of the cheques in question. Further, it has been stated that CW - 1 did not rectify such defect in authority despite the same been brought to his notice at the time of his cross- examination. Per contra, the learned counsel for the Complainant contends that it is an admitted position that Beautex Advertising Media is a unit of Beautex Communication Private Limited as is evident from the invoices Ex. CW1/3 to Ex. CW1/5 as well as the memo of parties. He states that after going through the trial, the Accused cannot, at the stage of final arguments take such a defence Page 18 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 19 of 24 and the right of the Accused to dispute the locus standi of the Complainant stands waived.
12.13. On a close scrutiny of the record, the aforenoted contention raised by the defence is found to be well merited. Perusal of the board resolution Ex. CW1/2 would reveal that it has been issued by Beautex Communication Private Limited in favour of CW-1. It has not even a whisper of the fact that Beautex Advertising Media is a unit of Beautex Communication Private Limited. Further, CW - 1 has admitted in his cross examination that Beautex Advertising Media has a separate account. CW - 1 had also admitted that there is no mention of the fact that Beautex Advertising Media is a unit of Beautex Communication Private Limited in Ex. CW1/2. On the one hand, it is the case of the Complainant that that Beautex Advertising Media is a unit of Beautex Communication Private Limited whereas on the other hand CW - 1 admits that the two entities have separate accounts.
12.14. In these circumstances, we are mention of Beautex Advertising Media in the memo of parties or in the invoices will not help the case of the Complainant. In a prosecution u/s 138 of the NI Act, Complainant must show, when called upon to do so, that he has the necessary authority to file an prosecute the present Complaint and that he stands as the payee in relation to the Accused. At the cross- examination of CW - 1, a dispute had been raised by the defence in respect of the authority locus standi of the Complainant to file the present Complaint. However, neither the Complainant company nor Page 19 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 20 of 24 CW - 1 took any steps to rectify the defect or to clarify that the two companies are related to each other or that Beautex Advertising Media is a subsidiary unit of Beautex Communication Private Limited. The aforesaid omission cast serious doubts on the case of the Complainant, especially when it has been admitted that the two entities have separate accounts. Further, it cannot be said that the said objection has been waived by the defence. The defence has raised the said objection at an appropriate stage.
12.15. In the case of Milind Shripad Chandurkar v. Kalim M. Khan 12, the Hon'ble Supreme Court upheld dismissal of a complaint when the Complainant was not able to establish his locus standi. It was observed that:
"18. Section 7 of the 1881 Act defines "payee" as the person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid. Section 8 defines "the holder of the cheque" as "any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto". Section 9 defines "holder in due course" as any person who for consideration became the possessor of a cheque if payable to a bearer or the payee or endorsee thereof.
19. Section 138 provides for penalties in case of dishonour of certain cheques for insufficiency of funds in the accounts. However, the exception contained in clause (c) thereof reads as under:
"138. (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, 12 (2011) 4 SCC 275 Page 20 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 21 of 24 as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice."
20. Section 142 provides for taking cognizance of the offence notwithstanding anything contained in CrPC which reads as under:
"142. (a) no court shall take cognizance of any offence punishable under Section 138 except upon a Complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque."
12.16. In National Small Industries Corpn. Ltd. v. State (NCT of Delhi)13 the Hon'ble Supreme Court held as under:
"14. The term 'Complainant' is not defined under the Code. Section 142 of the NI Act requires a Complaint under Section 138 of that Act to be made by the payee (or by the holder in due course)."
12.17. The Hon'ble High Court of Delhi had reiterated the above judgment of the Hon'ble Apex Court in Mohammad Aslam vs. Ramesh Thakur14, and has stated that a person can only claim to be the payee of the cheque if his identity is established and is in conformity with the entry made in the column of payee of such cheque. Thus, the instant Complaint ceases to be maintainable as it cannot be said to have been filed by the payee or the holder in due course of the 13 (2009) 1 SCC 407 14 Crl. L.P. 102/2015 Page 21 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 22 of 24 cheques in question.
12.18. The result of the foregoing discussion is that the aforesaid ingredient remains unfulfilled as against the Accused persons.
(b) That the cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
12.19. This requirement is satisfied on a perusal of the cheques in question Ex. CW1/6 to Ex. CW1/8 which bear date of 29.04.2015, 30.04.2015 and 30.04.2015 and the return memos Ex. CW1/9 to Ex. CW1/11 which bear the date of 21.07.2015, 24.07.2015 and 24.07.2015. The defence has led no evidence to controvert the same and hence, this ingredient stands fulfilled as against the Accused persons.
(c) That the cheque has been returned by the drawee bank unpaid, for the reason that the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by agreement made with that bank 12.20. s. 146 of the Negotiable Instruments Act, 1881 provides that the court shall, on production of bank's slip or memo having therein the official mark denoting that the cheque has been dishonored, presume the fact of dishonour of such cheque, unless and until such fact is disproved. The bank return memos Ex. CW1/9 to Ex. CW1/11 on record states that the cheques in question have been returned dishonoured for the reason "Funds Insufficient". The defence has led no evidence to controvert the same and hence, this Page 22 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 23 of 24 ingredient is also fulfilled as against the Accused persons.
(d) That the payee or holder in due course has made a demand for payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid 12.21. As regards the service of legal demand notice, the Complainant has sent the same, Ex. CW1/12 to the Accused. The original postal receipts & track report in respect of the same are already on record as Ex. CW1/3 to Ex. CW1/22. The Accused persons have not disputed the service of legal demand notice at any point in trial.
12.22. section 27 of the General Clauses Act provides that service of any document sent by post, shall be deemed to be effected by properly addressing, prepaying and posting by registered post, a letter containing the document unless the contrary is proved. A like presumption is also carved out under section 114 Indian Evidence Act, 1872 which when applied to communications sent by post, enables the court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee.
12.23. The Accused persons have neither disputed the service of notice nor brought any evidence on record to rebut the presumption of service. Resultantly, the benefit of the presumption accrues in the favour of the Complainant and this ingredient is fulfilled as against the Accused persons.
(e) That the drawer of the cheque fails to make the payment of the Page 23 of 24 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 530785/2016 CNR. DLCT020098892015 Beautex Advertising Media V/s Chandel Advertising Page 24 of 24 said amount of money to the payee or holder in due course within 15 days of receipt of the said notice 12.24. In the instant case, the Accused persons have not disputed receipt of legal demand notice. It is an admitted position between the parties that the Accused persons have failed to pay the cheque amount within the statutory period, on the ground that they do not owe any liability towards the Complainant, a defence which they have proved separately at the trial. Hence, this ingredient stands fulfilled as against the Accused.
Decision
13. As all the ingredients of the offence are not cumulatively satisfied against the Accused persons, the Accused No. 1 M/s Chandel Advertising Pvt. Ltd., Accused No. 2 Mr. Alok Aggarwal and Accused No. 3 Mrs. Renu Chandel are all hereby Acquitted of the offence u/s 138 of the Negotiable Instruments Act, 1881.
VISVESH Digitally signed by VISVESH Date: 2021.09.08 15:21:40 +05'30' ANNOUNCED BY VIDEO (VISVESH) CONFERENCE MM, NI ACT-06, CENTRAL TIS HAZARI COURTS, DELHI Page 24 of 24
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