Delhi District Court
Bajaj Enterprises P. Ltd. vs M/S Pioneer Paper Agency (Mr. Rajesh ... on 3 November, 2020
Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain)
CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015
IN THE COURT OF ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE (EAST DISTRICT)
KARKARDOOMA COURTS COMPLEX, DELHI.
Presiding Officer: Dinesh Kumar, DJS
In the matter of:
Bajaj Enterprises P. Ltd.
Through its AR Mr. Dinesh Kr. Bajaj/Mr. Archit Bajaj.
Vs
1. M/s Pioneer Paper Agency
Through its Proprietor/Authorized Signatory.
2. Mr. Rajesh Kumar Jain
Proprietor/Authorized Signatory of
M/s Pioneer Paper Agency.
PS: Preet Vihar
Under Section 138, the Negotiable Instruments Act (Act no.26
of 1881).
Date of Institution : 24.01.2015
Date of reserving of order : 06.10.2020
Date of Judgment : 03.11.2020
JUDGMENT
1. CNR No. : DLET02-001805-2015
2. Serial No. of the case : 47569/2016
3. Name of the Complainant :
Bajaj Enterprises P. Ltd.
Having its office at: 980-81/10, Makki Market, Chawri Bazar, Delhi-110006. Through its AR Mr. Dinesh Kr. Bajaj/Mr. Archit Bajaj
4. Name of accused :
1. M/s Pioneer Paper Agency Through its Proprietor/Authorized Signatory
2. Mr. Rajesh Kumar Jain Page 1 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 Proprietor/Authorized Signatory of M/s Pioneer Paper Agency.
Both at: Shop No.980-81, 3/7, 1st floor, Makki Market, Chawri Bazar, Delhi-110006 Also at: 113/6B, Gali No.1, West Azad Nagar Krishna Nagar, Delhi-110051 Also at: C/o Mr. J.D. Jain, Second Floor, F1-65, Mangal Bazar, Laxmi Nagar, Delhi-110092.
Also at: Email: [email protected]
5. Offence for which complaint was made : Sec. 138, the N.I. Act.
6. Offence for which Notice has been served : Sec. 138, the N.I. Act.
7. Plea of accused : Not guilty
8. Final Order : Acquitted
9. Date of Judgment : 03.11.2020 BRIEF REASONS FOR THE ORDER
1. M/s. Bajaj Enterprises P. Ltd., the complainant, has filed the present complaint under Section 138, Negotiable Instruments Act, 1881 (hereinafter called the NI Act), against accused Mr. Rajesh Kumar Jain, the proprietor/Authorized Signatory of M/s Pioneer Paper Agency. In the memo of parties two accused have been mentioned i.e., the proprietor Mr. Rajesh Kumar Jain and the proprietary concern itself. However, as per law, a sole proprietorship concern is not a legal entity. In the case of a sole proprietary concern, there are no two persons in existence. Therefore, no vicarious liability may ever arise on any other person except the sole proprietor. The identity of the sole Page 2 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 proprietor and that of his 'concern' remain one. Therefore, the principle contained in Section 141 of the N.A. Act is not applicable to a sole-proprietary concern. Hence, there is only one accused in the present case, i.e., Mr. Rajesh Kumar Jain. The memo of the parties shall be read accordingly. The complainant has stated its case as under:
1.1. The complainant company, a duly registered company with the Registrar of Companies, deals in all kinds of papers/boards etc. 1.2. The accused used to purchase goods on credit from the complainant and used to make on-account ad-interim payments by RTGS and cheques. As per the ledger account of the accused, maintained in the books of accounts of complainant, accused was liable to pay Rs.54,21,785/- to the complainant. 1.3. In discharge of his liabilities towards the complainant, the accused issued 25 cheques, all drawn on DCB Bank Ltd. Chandni Chowk, Delhi, in favour of the complainant.
1.4. All the cheques were signed by the accused and same were given with an assurance that the same would be duly honoured on presentation.
1.5. However, on presentation, nineteen cheques, out of the above 25 cheques were returned dishonored on Page 3 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 19.09.2014 as there was no sufficient funds in the bank account of the accused.
1.6. On subsequent presentation, all twenty five cheques were again returned dishonored vide twenty-five return memos.
1.7. A Legal Notice dated 28.11.2014 was sent to the accused by the complainant through his counsel by E-
mail and Registered Post with AD cards which was duly served upon the accused. However, despite receipt of legal notice accused failed to make any payment within the statutory period. Hence, this complaint.
2. After perusing the material available on record, Ld. Predecessor took the cognizance and process was issued against the accused. Accused appeared in the Court. He was released on bail. The copies of documents and complaint were supplied to him.
3. Mr. Dinesh Kumar Bajaj, AR of the complainant, examined himself as CW1, by leading evidence through affidavit, to prove the case. The CW-1 has reiterated the facts stated in the complaint. He has relied upon the following documents:
a) The Board resolution of the complainant company is Ex. CW1/1;
b) The Certificate of Incorporation of the complainant is Ex. CW1/2 (colly.);Page 4 of 37 ACMM/EAST/KKD/03.11.2020.
Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015
c) The complaint is Ex.CW1/3;
d) the copy of the directory of Paper Merchants Association showing the name and other details of the complainant is Ex.CW1/4;
e) the copies of 14 office invoices issued by the complainant for the goods supplied to the accused are Ex.CW1/5(colly.);
f) Printout of the electronic ledger of the complainant along with the certificate of the C.A. is Ex.CW1/6 (colly.);
g) the original 25 cheques are Ex.CW1/7 to Ex.CW1/31;
h) the bank return memos dated 19.09.2014 are Ex.CW1/32 to Ex.CW1/50;
i) the 25 bank return memos, on the basis of which present case has been filed are Ex.CW1/51 to Ex.CW1/75;
j) Copy of legal notice dated 28.11.2014 is Ex.CW1/76;
k) Postal receipts are Ex.CW1/ 77 (colly);
l) the print out of the notice sent through email with certificate of the advocate is Ex.CW1/78 (colly.);
m) the returned postal envelopes are Ex.CW1/79(colly.);
n) the copy of the directory of Paper Merchants Page 5 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 Association showing the name and other details of the accused is Ex.CW1/80.
4. The witness was cross examined. The complainant did not examine any other witness. Therefore, CE was closed.
5. The accused was examined under Section 313 Cr.P.C. r/w Section 281, Cr.P.C., by putting all the incriminating evidence and circumstances to him, and his statement was recorded. He denied the incriminating evidence.
6. The accused entered into witness box and examined himself as DW1. He would depose, inter alia, that he had business dealings with the complainant since 2002. In the last week of May 2014, he had placed an order of 100 Tons SBS Boards in size 59 inches of 300 GSM @ Rs. 59 per kg, to the complainant company. As per the business practice, the complainant used to take blank signed security cheques from him before supplying the material. During the abovesaid transaction also, he had handed over blank signed cheques to the complainant. He was assured that the delivery of the said order would be completed by first week of June, 2014. The complainant had supplied total 88438 kg of SBS Board vide seven separate consignments between 11.06.2014 to 17.06.2014. He was maintaining a ledger account of the complainant in his books of accounts. The copy of the ledger account for the period w.e.f 01.04.2014 to 31.03.2015 is Ex. AW-1/1. The certificate under Page 6 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 section 65-B, Indian Evidence Act in support of the said document is Ex. AW-1/2.
7. DW-1 would further depose that the consignment received from the complainant was defective as there was shade variation as well as GSM variation. In third week of June 2014, he raised a complaint regarding the same with the complainant. The complainant admitted that there was huge variations in the material supplied and he requested to use the material. However, the variation was high and therefore, he informed the complainant that he was not able to use the material and asked the complainant to replace it. The complainant agreed to replace the same. He promised to replace the same by first week of July 2014. However, the complainant failed to replace the material despite waiting till 20.07.2014. Thereafter, he started making payment to the complainant on account instead of transaction wise payment w.e.f. 21.07.2014. When the complainant failed to replace the material by 28.07.2014, he stopped the payment of the complainant and requested him to settle the matter before resuming further business dealings. In the second week of August 2014, the complainant promised to replace the material by end of August 2014 and asked to resume the business dealings. On the basis of said assurance, he resumed business transactions with the complainant w.e.f. 13.08.2014 and started making on account payment from 20.08.2014. However, the complainant failed to replace the Page 7 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 material. He contacted the complainant through telephone on 03.09.2014 and asked about the same. The complainant told that he would not be able to replace the material at any cost. The complainant told that he would get the material picked from him. The complainant also said that he was not required to make the payment of the defective material and requested to clear the outstanding of other transactions. On 04.09.2014, he finally settled the account with the complainant by making payment of Rs. 5 Lacs through RTGS. Between 04.09.2014 to 10.09.2014, the complainant also picked up the defective material from his godown through his transporter. The receipts of the goods returned to the transporter are Ex. AW-1/3 to Ex. AW-1/5. The document reflecting details of debit / credit note related to return of goods of the complainant company by the accused retrieved from the website of Delhi VAT is Ex. AW1/6 and certificate under section 65-B, Indian Evidence Act is Ex. AW-1/2. After returning the goods, he requested the complainant to return the blank signed cheques which were kept as security. The complainant promised to return them after receiving them back from the accountant. He never received any legal demand notice from the complainant. The cheques were presented by the complainant without his consent and knowledge. His email-id has been hacked since September, 2014. He had made a complaint to Cyber Cell, Delhi Police in this regard. The copy of the complaint dated 11.03.2015 is Ex. AW-
Page 8 of 37 ACMM/EAST/KKD/03.11.2020.Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 1/7. The complainant had misused his cheques.
8. The witness was cross-examined. DE was closed vide order dated 04.02.2017 and the matter was fixed for final arguments. After hearing of final arguments, when the matter was fixed for clarification, the accused moved an application under Section 311, Cr.P.C. for leading additional evidence. The application was allowed.
9. The accused examined Mr. Bhushan Kumar, Ahlmad in the Court of Ms. Shilpi Jain, Ld. MM-01, Central, Tis Hazari Courts. The witness produced the record of FIR no.237/1014, PS Jama Masjid. The copy of the FIR is Ex.DW2/1. He also produced the record of CC no.404/2017 titled Rajesh Kumar Jain vs Unknown. The copy of the complaint is Ex.DW2/2(OSR). The copy of the status report filed by the IO in the said case is Ex.DW2/3 (OSR).
10. The accused also examined Inspector Praveen Kumar, Anti Corruption Branch, GNCTD, Delhi. He would state that on 01.10.2014 he was posted as Inspector at PS Jama Masjid, Delhi. He had registered the FIR no.237/14 on the basis of the complaint of Mr. Dinesh Bajaj. During investigation, he came to know about the two bank accounts of the accused. On 09.10.2014, he sent two letters under Section 91, Cr.P.C. to the DCB Bank asking for blocking those two accounts of the accused. He also asked for some documents from the bank. The copy of the letter is Page 9 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 Ex.DW3/1. After 2 days, he had received a response from the bank whereby he was informed that the accounts were blocked as requested. He also received the copies of the documents as required.
11. All the witnesses were cross examined. The accused did not examined any other witness. The defence evidence was closed.
12. The complainant also moved an application under Section 311, Cr.P.C. seeking permission to lead additional evidence. The said application was allowed by Ld. Predecessor.
13. The complainant examined Mr. Aman Chawla, the Customer Services Executive, the DCB Bank Ltd., Chandni Chowk. The witness brought the summoned record. He has produced statements of the account of the accused in the said bank. The account statements are Ex.CW2/1 (colly.), Ex.CW2/2 (colly.), Ex.CW2/3(colly.). He also produced the copy of letter dated 09.10.2014 received in the bank from Praveen Kumar, Inspector, PS Jama Masjid, Delhi, and the copy of reply sent by the bank to the inspector. The copies are Ex.CW2/4 and Ex.CW2/5 respectively. He has also produced the copy of letter issued by the bank to the account holder informing him about the letter received from the police inspector as abovesaid. The copy of the said intimation letter is Ex.CW2/6. No response was received from the account holder after sending the said intimation. No request for Page 10 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 defreezing was received from the account holder or from any authority.
14. The witness was cross examined. The CE was closed. Supplementary statement of the accused was recorded under Section 313, Cr.P.C r/w Section 281, Cr.P.C. Thereafter, the matter was fixed for final arguments.
15. Ld. Counsel for the complainant would argue that the complainant has proved its case beyond reasonable doubts. It is proved that the accused was having financial and business transactions with the complainant and that he had purchased the material from the complainant as stated by the complainant. The complainant has also proved that the accused had received the material. The accused has however failed to show that the material was defective and that it was returned to the complainant as claimed by him. The complainant has also proved that the accused had issued the cheques in question to discharge his legal liability. It has also been proved that the cheques were dishonoured. Service of legal notice has also been proved. The accused was liable to make the payment, however, he did not make the payment within stipulated time despite service of legal notice. It is also proved that all the steps were taken by the complainant within the time provided by the law. Hence, the accused may be convicted for the offence under Section 138, NI Act. Ld. Counsel has relied upon the following judgments:
Page 11 of 37 ACMM/EAST/KKD/03.11.2020.Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015
a) Goa Plast Pvt. Ltd. vs Chico Ursula D'souza 2004 AIR (SC) 408.
b) M.M.T.C. Ltd. and Anr. vs Medchi Chemicals and Pharma Pvt. Ltd. 2002 AIR (SC) 182.
c) S.L. Construction and Anr. vs Alapati Srinivasa Rao and Anr. 2009 AIR (SC) 1538.
d) T. Vasanthakumar vs Vijayakumari 2015 AIR (SC) 2240.
e) Lafarge Aggregates & Concrete India Pvt. Ltd. vs Sukarsh Azad 2014 (3) SLT 90.
f) Laxmi Dychem vs State of Gujrat 2012 (9) SLT 54.
16. Per contra, Ld. counsel for the accused would argue that the complainant has failed to prove its case against the accused beyond reasonable doubts. The accused has been falsely implicated. His security cheques were misused by the complainant. The accused had business dealings with the complainant. In the course of those dealings, the accused had issued various security cheques to the complainant. After settlement of the account, the accused had demanded his cheques back. However, the complainant misused those cheques and filed a false case against the accused. The material supplied by the complainant was defective and therefore, it was returned to the complainant through its transporter as per the directions of the complainant. The accused has produced the documents to that effect in his defence Page 12 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 evidence. Thus, the accused has shown that he did not have legal liability to make payment to the complainant. Therefore, the accused can not be convicted for the offence punishable under Section 138 N I Act. It has been further argued that even the complainant has failed to prove its case beyond reasonable doubts against the accused. The Board resolution Ex. CW-1/1 is not a proper resolution. Hence, the complaint itself is not maintainable. Further, the complainant has relied upon its ledger account and invoices which are Ex. CW-1/5 colly and Ex. CW-1/6 colly. The documents are computer generated print outs. However, there is no certificate under section 65-B Indian Evidence Act to prove those documents. The documents therefore can not be read in evidence. Without these documents, the complainant can not prove any liability. It has been further argued that the cheques in question had been dishonoured for the reason 'account blocked'. It is on record that the account of the accused had been blocked by the bank at the instructions of the IO of an FIR registered against the accused on a complaint of the complainant. The complainant had deposited the cheques even after knowing that the account had already been blocked by the bank. The complainant misused the process of law by presenting the cheques and getting them dishonoured for filing criminal prosecution against the accused. As per law, once it is shown that the accused was not maintaining the account at the time when the cheques were dishonoured, he can Page 13 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 not be held liable for an offence punishable under Section 138 N I Act. Hence, it is prayed that the accused may be acquitted. Ld. Counsel has relied upon the following judgments:
a) Kundan Lal vs Custodian Evacuee Property Bombay AIR 1961 SC 1316.
b) Bharat Barrel and Drum Manufacturing Company vs Amin Chand Pyare lal AIR 1999 SC 1008.
c) M.S. Narayana Menon @ Mani vs State of Kerala and anr. 2006 (6) SCC 39.
d) Birender Singh vs State of NCT 2008 1 JCC NI 15.
e) Onkar Nath Goenka vs Gujrat Lease and Finance Ltd.
(2008) 4 BC 514.
f) Prem Chand Gupta vs State and Anr. Crl. M.C. no.
145/2009, High Court of Delhi, order dated 21.01.2010.
g) Kusum Ingots vs Pennar Piterson Securities Ltd. AIR 2000 SC 1954.
h) Anvar PV vs PK Basheer and Ors. (2014) 10 SCC 473.
i) Ashok Bampto Pagui vs Agencia Real Canacona Pvt.
Ltd. 2007 (6) Mh. LJ 94.
j) M/s. Ceasefire Industries Ltd. vs State and Ors. Crl.
LP no. 51/2017, High Court of Delhi, order dated 01.05.2017.
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17. In rebuttal, Ld. Counsel for the complainant would argue that the accused has taken false defence. He has failed to show even prima facie that the goods were defective and that they were returned to the complainant. The documents Ex. AW- 1/3 and Ex.AW-1/4 are forged and fabricated documents and they are not related to the complainant. Further, the Board resolution in favour of the AR is proper and it is not defective. The complainant has also led complete evidence to prove the liability of the accused. In his affidavit, the CW-1 has mentioned all the ingredients of the certificate required under section 65-B, Indian Evidence Act. The accused had not taken any objection at the time when the invoices and the ledger account were tendered in evidence by CW-1. The documents have therefore been proved as per law. At the stage of final arguments, the accused can not take the said objection. Further, it is shown on the record that the bank had only stopped the debit entries in the accounts of the accused and not the credit entries. The accused was also aware of the same. Therefore, he could have maintained sufficient balance in his account to honour the cheques. However, there was no sufficient balance in the account of the accused at the time when the cheques were presented for encashment. Therefore, he is liable for an offence punishable under Section 138 N I Act. Hence, it is prayed that the accused may be convicted.
18. I have heard the rival submissions of the Ld. Page 15 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 counsels of the parties and carefully perused the material available on record.
19. The law as laid down in relation to the Negotiable Instruments Act is discussed in various judgments. It is settled position of law that there is a presumption in favour of the complainant and against the accused. However, the presumption is rebuttable. Hon'ble Supreme Court of India in Rangappa vs Sri Mohan, (2010) 11 SCC 441 has discussed the law in detail. The Hon'ble Supreme Court has held as under:
"14. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of Page 16 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. 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'. 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. As clarified in the citations, 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."
20. Thus, it has been settled that there is a presumption in favour of the complainant and against the accused, that the cheque was issued for consideration. However, the presumption is rebuttable. The accused can prove that the cheque was not issued for consideration and that the accused did not have any liability to pay the amount. It has also been held that the Page 17 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 accused need not lead evidence in support of his defence. He can prove it on the balance of probabilities by showing the contradictions in the material produced by the complainant.
21. In the present case, the very first defence of the accused is related to the maintainability of the complaint. It has been argued that the board resolution of the complainant company in favour of the AR is not proper. The reason of the dishonoring of the cheques is not correctly mentioned in the resolution. Therefore the complaint is liable to be dismissed. Ld. Counsel has relied upon the judgment titled Ashok Bampto Pagui vs Agencia Real Canacona Pvt. Ltd. 2007 (6) Mh. LJ 94. Ld. Counsel has also filed a copy of the judgment titled Mr. Roy Joseph Creado, Mr. Anil vs SK. Tamisuddin 2008 (2) BomCR 242 in support of his submission.
22. I have considered the submission. I have perused the board resolution Ex.CW1/1. I have studied the judgments also. The board resolution Ex.CW1/1 gives authority to Mr. Dinesh Kumar Bajaj and Mr.Archit Bajaj, the directors of the complainant company, to do various acts, including filing of criminal complaint under Section 138, NI Act, against Rajesh Jain, the proprietor of two firms mentioned in the resolution, in relation to 25 cheques which have been dishonoured on account of insufficient funds. The board resolution is proper. The fact that in the board resolution reason of dishonoring of the cheques is mentioned as Page 18 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 "insufficient funds" while cheques were dishonored for the reason 'account blocked' does not make the resolution faulty. The judgments relied upon by the accused are distinguishable on facts. In Ashok Bampto Pagui vs Agencia Real Canacona Pvt. Ltd. 2007 (6) Mh. LJ 94, no board resolution was filed on record on behalf of the company and it was held that even a director of a company could not represent the company without a board resolution in his favour. In Mr. Roy Joseph Creado, Mr. Anil vs SK. Tamisuddin 2008 (2) BomCR 242, the Court had held that a special power of attorney holder could only file a complaint on behalf of the complainant. The matter was not related to board resolution of a company.
23. In the light of the discussion I hold that the board resolution Ex.CW1/1 is valid and the complaint is maintainable on this aspect.
24. There is another defence taken by the accused at the time of disclosing his defence and during his examination under Section 313, Cr.P.C. The accused would state that he had not received the legal notice. Even though no arguments have been advanced by Ld. Counsel for the accused on the said aspect, I am of the opinion that it would be proper if the issue is decided by this Court.
25. Perusal of the record would show that the complainant has filed the copy of legal notice and postal receipts.
Page 19 of 37 ACMM/EAST/KKD/03.11.2020.Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 The postal receipts are not disputed. The accused has also not disputed that the address mentioned on the legal notice is not his address. Rather, he has admitted the said fact in his cross examination.
26. Once it is shown by the complainant that he had posted the legal notice at the correct address of the accused, the requirement of law stands satisfied. No further proof of service of legal notice is required. The duty of the complainant was to give a legal notice. It has proved that it had given a legal notice to the accused under Section 138 N. I. Act. Hence, it has discharged the burden. It has been proved that complainant had issued a legal notice under Section 138 N.I. Act within limitation period after dishonouring of the cheque. The complaint is therefore maintainable on this aspect. I get strength from the judgment of the Hon'ble High Court of Delhi in Mayank Pathak Vs. Elcome Trading Company Pvt. Ltd. and Anr. 231 (2016) DLT 308. In the abovesaid matter before the Hon'ble High Court of Delhi, one of the ground of defence taken by the accused was that legal notice under Section 138 N. I. Act was not served upon him as it was not sent at the correct address of the petitioner. The Hon'ble High Court of Delhi, while dismissing this ground, has held that service of summons in such cases can be considered as service of notice and drawer of the cheque is having option to make the payment within 15 days of the receipt of the summons of the Court Page 20 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 alongwith the copy of the complaint under Section 138 of the Act. The Hon'ble High Court has held as under:
"10. Other limb of argument advanced by the counsel for the petitioner is that the legal notice sent to the petitioner was never received by the petitioner as the same was never sent to the correct address of the petitioner. "11. Perusal of record shows that legal notice Ex.CW1/9 was sent on two addresses of the petitioner i.e. L-7, Back Side Ground Floor, Lajpat Nagar-II, New Delhi and I-90, Lower Ground Floor, Lajpat Nagar, Delhi. The legal notice sent on the former address was received back with the report that the addressee had left the address. Whereas, the notice sent on the latter address was not received back. The contention of the petitioner is that his address was never of I- 90, Lajpat Nagar but was L-90, Lajpat Nagar-II. Even if for the sake of arguments, it is believed that the address was not correctly mentioned on the legal notice, the judgment of Hon'ble Apex Court in the case of C.C. Alavi Haji v. Papaletty Muhammed & Anr. 2007 (2) JCC (NI) 25 makes it clear that a if person does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot contend that there was no proper service of notice as required under Section 138 of the Act. Relevant para from the judgments is quoted hereunder:
"It is also to be borne in mind that the requirement of giving of notice is a clear Page 21 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring the statutory presumption to the contrary under Section 17 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case (supra), if the "giving of notice" in the context of Clause
(b) of the proviso was the same as the "receipt of notice" a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."
"12. In C.C. Alavi Haji's case (supra), it is made clear that drawer of the cheque is having option to make the payment within 15 days of the receipt of the summons of the Court along with the copy of the complaint Page 22 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 under Section 138 of the Act. But in the present case, it is nowhere the case of the petitioner that despite having received the copy of the summons of the Court along with a copy of the complaint under Section 138 of the Act, he had made the payment. So, the service of legal notice was not mandated and the petitioner was having the opportunity to make the payment within 15 days of the receipt of the summons of the Court. Now, he cannot contend that there was no proper service of notice."
27. I have been enlightened by the judgment of the Hon'ble High Court of Delhi in Mayank Pathak v. Elcom Trading Company Pvt. Ltd. (supra). I have also been enlightened by the judgment of the Division Bench of the Hon'ble High Court of Delhi in Prakash Jewellers vs A.K. Jewellers 99 (2002) DLT 244. The judgment of the Division Bench is of the year 2002. In the said case also, the accused had taken the defence that he had not received the notice under Section 138 N. I. Act. The Hon'ble High Court dismissed the objections and held as under:
"8. There is no dispute with the proposition that a statutory obligation is cast on the holder of the cheque or the payee to give notice of demand to the drawer of the cheque asking him to make a payment of the amount covered by the cheque. It is a mandatory requirement to be satisfied for constituting an offence under Section 138.Page 23 of 37 ACMM/EAST/KKD/03.11.2020.
Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 "9. It is also settled that it is not the giving of the notice which makes out an offence but its receipt which furnishes a cause of action to the complainant to file the complaint within statutory period. "10. As it is, Section 138 does not prescribe any mode for giving of demand notice by the payee or holder of the cheque. But where such notice is served by post through registered post or postal certificate, etc. with the correct address of the drawer written on it, it would raise a presumption of service unless the drawer proves that it was not received by him in fact and that he was not responsible for such non-service. This is in tune with the principle embodied in Section 27 of the General Clauses Act or even Rule 19-A of Order V CPC.
"11. Section 27 of General Clauses Act deals with the presumption of service of notice sent by post and provides that service of such notice shall be deemed to have been affected unless the contrary is proved. This principles is equally applicable to the service of notice for purpose of Section 138of Negotiable Instrument Act also. The same could be said about the provision of Rule 19-A or Order V CPC which requires a court to make a declaration of summons having been duly served and dispatched through registered post notwithstanding that AD Card had been lost or misplaced or not received back within 30 days for some other reason. The Page 24 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 relevant proviso provides:-
"Provided that where the summons was properly addressed, prepaid and duly sent by registered post, acknowledgement due, the declaration referred to in this sub-rule shall be made notwithstanding the fact that the acknowledgement having been lost or mislaid, or for other reason, has not been received by the Court within thirty days from the date of the issue of the summons."
"12. Proceeding on this premise and going by this logic, we find no hitch in taking the view that payee or the holder of a cheque was as much entitled to claim the benefit of presumption of service once he had dispatched the demand notice through registered post or postal certificate on the correct address of the sendee written on it and where he had proved such dispatch through original receipts. It becomes inconsequential whether sender had not received back the AD card or that he could not produce or prove it for having misplaced it or for some other reason."
(Emphasis supplied).
28. In the present case also, the complainant has proved that it had issued a legal notice under Section 138 N.I. Act. The service of legal notice is to be presumed in view of the judgment of the Hon'ble High Court of Delhi in Mayank Pathak Vs. Elcome Trading Company Pvt. Ltd. and Anr. 231 (2016) DLT 308.
Page 25 of 37 ACMM/EAST/KKD/03.11.2020.Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015
29. It has also been argued by Ld. Defence Counsel that the complainant has failed to prove the liability of the accused beyond reasonable doubts. It has been argued that the invoices Ex.CW1/5 (colly) and the ledger account Ex.CW1/6 (colly) are printouts of electronic record. However, no certificate under section 65B, Indian Evidence Act has been filed by the Complainant and therefore these documents can not be read in evidence. Without these documents, the complainant has failed to prove any liability of the accused. Ld. Counsel has relied upon the judgment of the Hon'ble Supreme Court of India in Anvar PV vs PK Basheer (supra).
30. I have considered the submission. Perusal of these documents would show that Ex.CW1/5 (colly) are the photocopies of the invoices raised by the complainant for the goods supplied to the accused. These documents are not printouts of the electronic record, which require certificate under Section 65B of the Act, as the invoices have been manually signed on behalf of the complainant after they were prepared using the electronic mode. In such cases, there is no requirement of a certificate as abovementioned. If such a contention is accepted, then a certificate would be required even to prove an application printed using a printer and signed by the applicant.
31. Ex.CW1/6 (colly) is printout of the ledger account of the accused maintained electronically by the complainant. The Page 26 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 said ledger account is also shown to have been validated by a Chartered Accountant on every page.
32. Be that as it may, the accused had not taken any objection of mode of proof of these documents at the time when these documents were relied upon by the complainant in evidence and they were exhibited as such. As per law, the accused should have taken the objection at the stage of examination of the witness who had relied upon these documents and exhibited them. No such objection is shown to have been taken by the accused. Therefore, now, at this stage, the accused can not be allowed to argue that the documents can not be read in evidence. In Anvar PV vs PK Basheer (supra), Hon'ble Supreme Court has held that a certificate under Section 65B, Indian Evidence Act is required to prove copies of electronic record which are secondary evidence. Hon'ble Supreme Court of India in Sonu @ Amar vs State of Haryana, Crl A. no.1418/2013, decided on 18.07.2017 has discussed the ratio of the judgment of Anvar PV. It has held as under:
"26. That an electronic record is not admissible unless it is accompanied by a certificate as contemplated under Section 65B (4) of the Indian Evidence Act is no more res integra. The question that falls for our consideration in this case is the permissibility of an objection regarding inadmissibility at this stage. Admittedly, no objection was taken when the CDRs were adduced in evidence before the Trial Court. It does not Page 27 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 appear from the record that any such objection was taken even at the appellate stage before the High Court. In Gopal Das v. Sri Thakurji, AIR 1943 PC 83, it was held that:
"Where the objection to be taken is not that the document is in itself inadmissible but that the mode of proof put forward is irregular or insufficient, it is essential that the objection should be taken at the trial before the document is marked as an exhibit and admitted to the record. A party cannot lie by until the case comes before a Court of Appeal and then complain for the first time of the mode of proof." In RVE Venkatachala Gounder, this Court held as follows:
"Ordinarily an objection to the admissibility of evidence should be taken when it is tendered and not subsequently. The objections as to admissibility of documents in evidence may be classified into two classes: (i) an objection that the document which is sought to be proved is itself inadmissible in evidence; and (ii) where the objection does not dispute the admissibility of the document in evidence but is directed towards the mode of proof alleging the same to be irregular or insufficient. In the first case, merely because a document has been marked as 'an exhibit', an objection as to its admissibility is not excluded and is available to be raised even at a later stage or even in appeal or revision. In the latter case, the objection should be taken before the evidence is tendered and once the document has been admitted in evidence and marked as an exhibit, the objection that it should not have been admitted in evidence or that the mode adopted for proving the Page 28 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 document is irregular cannot be allowed to be raised at any stage subsequent to the marking of the document as an exhibit. The later proposition is a rule of fair play. The crucial test is whether an objection, if taken at the appropriate point of time, would have enabled the party tendering the evidence to cure the defect and resort to such mode of proof as would be regular. The omission to object becomes fatal because by his failure the party entitled to object allows the party tendering the evidence to act on an assumption that the opposite party is not serious about the mode of proof. On the other hand, a prompt objection does not prejudice the party tendering the evidence, for two reasons: firstly, it enables the Court to apply its mind and pronounce its decision on the question of admissibility then and there; and secondly, in the event of finding of the Court on the mode of proof sought to be adopted going against the party tendering the evidence, the opportunity of seeking indulgence of the Court for permitting a regular mode or method of proof and thereby removing the objection raised by the opposite party, is available to the party leading the evidence. Such practice and procedure is fair to both the parties. Out of the two types of objections, referred to hereinabove, in the later case, failure to raise a prompt and timely objection amounts to waiver of the necessity for insisting on formal proof of a document, the document itself which is sought to be proved being admissible in evidence. In the first case, acquiescence would be no bar to raising the objection in superior Court." [Emphasis supplied] It would be relevant to refer to another case decided by this Court in PC Purshothama Reddiar Page 29 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 v. S Perumal, (1972) 1 SCC 9. The earlier cases referred to are civil cases while this case pertains to police reports being admitted in evidence without objection during the trial. This Court did not permit such an objection to be taken at the appellate stage by holding that:
"Before leaving this case it is necessary to refer to one of the contentions taken by Mr. Ramamurthi, learned Counsel for the respondent. He contended that the police reports referred to earlier are inadmissible in evidence as the Head-constables who covered those meetings have not been examined in the case. Those reports were marked without any objection. Hence it is not open to the respondent now to object to their admissibility."
"27. It is nobody's case that CDRs which are a form of electronic record are not inherently admissible in evidence. The objection is that they were marked before the Trial Court without a certificate as required by Section 65B (4). It is clear from the judgments referred to supra that an objection relating to the mode or method of proof has to be raised at the time of marking of the document as an exhibit and not later. The crucial test, as affirmed by this Court, is whether the defect could have been cured at the stage of marking the document. Applying this test to the present case, if an objection was taken to the CDRs being marked without a certificate, the Court could have given the prosecution an opportunity to rectify the deficiency. It is also clear from the above judgments that objections regarding admissibility of documents which are per se inadmissible can be taken even at the appellate stage. Admissibility of a document which Page 30 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 is inherently inadmissible is an issue which can be taken up at the appellate stage because it is a fundamental issue. The mode or method of proof is procedural and objections, if not taken at the trial, cannot be permitted at the appellate stage. If the objections to the mode of proof are permitted to be taken at the appellate stage by a party, the other side does not have an opportunity of rectifying the deficiencies. The learned Senior Counsel for the State referred to statements under Section 161 of the Cr. P.C. 1973 as an example of documents falling under the said category of inherently inadmissible evidence. CDRs do not fall in the said category of documents. We are satisfied that an objection that CDRs are unreliable due to violation of the procedure prescribed in Section 65 B (4) cannot be permitted to be raised at this stage as the objection relates to the mode or method of proof."
33. In the present case also, the accused did not take the objection of mode of proof of these documents at the time when the documents were exhibited in evidence. Therefore, the documents stand proved as per law. They have to be read in evidence as per law. Hence, I do not find merits in this argument of Ld. Defence Counsel.
34. The next argument of Ld. Defence Counsel is that the accused had returned the Goods to the complainant as they were defective and not as per order. The goods were received by the transporter of the complainant on behalf of the complainant. Therefore, the accused is not liable to make payment to the Page 31 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 complainant.
35. I have considered the submission. Once, the accused submits that he had returned the goods to the complainant, it stands proved that the goods were received by the accused. Now, the burden was on the accused to prove that he had returned the goods to the complainant.
36. Perusal of the record would show that the accused has relied upon the documents Ex.AW1/3 and Ex.AW1/4 to show that he had returned the goods to the complainant. The complainant has denied receiving any material back from the accused. During cross examination of DW1, suggestion has been given to him that the documents were forged and fabricated. These documents do not bear any seal or stamp of the complainant or any other identification mark to show that the goods were so returned to the complainant. Who had received the goods on behalf of the complainant has not been stated in the evidence. The persons who had allegedly received goods on behalf of the complainant has not been examined by the accused. These documents are not able to prove that the accused had returned any material to the complainant. As abovesaid, the accused has admitted that he had received the material mentioned in the invoices relied upon by the complainant. He has however failed to prove that he had returned the goods to the complainant. In these circumstances, it stands proved beyond reasonable doubts that the accused was liable to Page 32 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 make payment to the complainant, for the goods supplied to him by the complainant, as claimed by the complainant.
37. The next defence of the accused is that at the time when the cheques were presented by the complainant and they were dishonoured, the account had been blocked by the bank, at the request of a police officer who had been conducting investigation in a case registered on a complaint of the complainant. This fact has been duly proved on record. Even in the returning memos the reason of dishonouring of the cheques is mentioned as 'account blocked'. It has been argued by Ld. Defence Counsel that at the relevant time the accused had not been maintaining the bank account, as its operation was blocked by the banker, and hence, the requirements of the law under Section 138, NI Act are not fulfilled and therefore the accused can not be convicted for the said offence. Ld. Counsel for the complainant, on the other hand would argue that only debit entries had been blocked and not the credit entries. Therefore, the accused could have deposited the money in his account sufficient for honouring of the cheques. However, he did not do so. Therefore, he can not take benefit of the said legal provision.
38. I have considered the submissions. It is on record that, as per return memo, the cheques in question had been dishonoured for the reason 'account blocked. The evidence on record also proves that the account of the accused had been Page 33 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 blocked at the direction of a police officer. The said police officer had been conducting investigation in a case registered on a complaint of the complainant herein against the accused herein. It can also be gathered safely from the material on record that the cheques in question were in possession of the complainant before the said FIR was registered and the account was blocked. Therefore, it can not be said that the accused was aware, at the time of handing over the cheques, that his account would be blocked in future. In Onkar Nath Goenka vs Gujrat Lease Finance Ltd. (supra) Hon'ble High Court of Delhi has discussed the effect of the fact where a cheque is dishonored for the reason that the account was freezed. It has held as under:
"8. The penultimate issue in the instant matter is whether or not the petitioner on the date on which the cheque was dishonoured and the date on which the payment in compliance of legal notice dated 13.7.1998 should have been made, was incapable of making the payment on account of the orders of CBI. The case of the petitioner before this Court is that he could not make payment, in view of the fact that CBI had freezed the account of petitioner. This fact is also evident from the return memo of the Bank, copy of which has been filed at page 28 of the paper book, which shows the endorsement "account frozen". Counsel for the petitioner further submits that the company has also gone into liquidation. The petitioner has also filed on record the order dated 15.6.1998 whereby the DRT of Delhi restrained M/s. Premier Vinyl Flooring Ltd., of which the petitioner was the Managing Director, from disposing of or Page 34 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 alienating or parting with the possession of its assets. The existence of the order dated 15.6.1998 is not denied by the respondent. Most importantly, the order dated 15.6.1998 predates the event of dishonour of cheques. It thus becomes explicit that inasmuch as the petitioner was also restrained by the order dated 15.6.1998 from alienating, selling, disposing of or parting with the possession of the assets of his company M/s. Premier Vinyl Flooring Ltd., the petitioner as such could not have touched any of its properties, movable or immovable."
39. Similarly, in M/s. Ceasefire Industries Ltd. vs State and Ors. Crl. LP no. 51/2017, High Court of Delhi, vide order dated 01.05.2017, has held as under:
"4. It appears a number of defences were raised by the respondents in resisting the prosecution for offences under Section 138 N.I. Act in the above mentioned criminal complaint cases, but what has clinched the issue in their favour is essentially the fact that cheques were returned unpaid on account of the account in question having been frozen. "5. It is noted that in the demand notice after the cheques had been returned, the complainant itself described the reasons for such return as "account freezed". This is what was reiterated by complainant's witness V.N. Raju in his affidavit submitted with the complaint. When he was examined on fresh affidavit at the trial he reiterated the reason now referring to the remarks in the return memos the same being "account blocked". The learned Metropolitan Magistrate accepted the said fact as good reason to dismiss the complaints. "6. In the opinion of this court, the view taken by the Page 35 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 Metropolitan Magistrate in the two complaint cases cannot be faulted. The provision contained in Section 138 of the N.I. Act makes it clear that it is not every return of a cheque unpaid which leads to prosecution of an offence under the said provision of law. For such purposes, the cheque must have been returned "unpaid" either because 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 an agreement made with the bank "7. The bank which returned the cheques unpaid had made it clear that the accounts had been blocked. It is clear that the complainant itself was aware that the accounts had been frozen in terms of directions by some statutory authority. In these circumstances, the reasons for return of the cheques unpaid being not what is envisaged in Section 138 of the N.I. Act, these petitions are devoid of merit and, therefore, dismissed."
40. Thus, the law which emerges from these judgments is that once a cheque is dishonored due to the reason of 'account blocked' the drawer of the cheque can not be held liable for offence punishable under Section 138, NI Act. No legal precedent has been brought to the notice of the Court to the contrary. The law does not provide any distinction in cases where debit and credit entries were freezed and where only debit entries were prohibited. Similarly, the argument of the complainant that the accused should have maintained the required balance in his account, is also not maintainable as no such observation has been Page 36 of 37 ACMM/EAST/KKD/03.11.2020. Bajaj Enterprises P. Ltd. Vs M/s Pioneer Paper Agency (Mr. Rajesh Kumar Jain) CT no.47569/2016 PS : Preet Vihar CNR No. DLET-02-001805-2015 made by the Hon'ble High Court in the abovementioned two judgments.
41. In the light of discussion herein above, I hold that the accused can not be held liable for an offence punishable under Section 138, NI Act, because the cheques had been dishonored for the reason 'account blocked.' The accused is, therefore, acquitted.
42. The accused has already furnished bond under Section 437A, Cr.P.C. along with one surety, photographs and ID proof.
Pronounced in open Court through Video Conferencing on this 03rd day of November 2020.
DINESH Digitally signed by DINESH
KUMAR
KUMAR Date: 2020.11.03 17:53:27
+05'30' (Dinesh Kumar)
Additional Chief Metropolitan Magistrate (East) Karkardooma Courts Complex, Delhi.
Page 37 of 37 ACMM/EAST/KKD/03.11.2020.