Delhi District Court
Mangal Murti Exim Pvt. Ltd vs I. Sustain Energy Pvt Ltd on 22 August, 2024
IN THE COURT OF SH. AAKASH SHARMA
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT)-03
SOUTH EAST, SAKET: NEW DELHI
1.Complainant case number 635974/2016
2. Name of the complainant M/s Mangal Murti Exim Pvt Ltd Through AR Sh. Arvinder Singh, Office at: A-6/A, Friends Colony East, New Delhi-110065
3. Name and address of the M/s I Sustain Energy Pvt Ltd accused persons (Accused No. 1) Having its Principal Place of business & works at:
Plot No. 106, Anupam Plaza, Local Shopping Complex, Ghazipur, New Delhi-110096.
Also at: 15th Floor, Eros Corporate Tower, Nehru Place, New Delhi-
110019.
Also at: 5th Floor, Punj Essen House, 17-18, Nehru Place, New Delhi-
110019.
Sh. Gaurav Rampal (Accused No. 2) Director of accused no. 1 company R/o 15/11-A, Moti Nagar, New Delhi-110015.
Also at: 13/7, Mathura Road, Faridabad.
Also at: 15th Floor, Eros Corporate Tower, Nehru Place, New Delhi-
110019.
Also at: 107, 1st Floor,, 5/9, Gurunanak Complex, Saraswati Marg, W.E.A. Karol Bagh, New Delhi-110005.
Also at: 30 Main Markert, Moti Nagar, New Delhi-110015.
Also at: DSM-317, DLF Tower, Shivaji Marg, New Delhi-110015.
Also at: DSM-139, 1st Floor, DLF Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.1 of25 AAKASH Digitally by AAKASH signed SHARMA SHARMA Tower, Shivaji Marg, New Delhi-
110015.
Sh. Vinod Kumar Ahuja (Accused no. 3) Director of accused no. 1 company, R/o 15th Floor, Eros Corporate Tower, Nehru Place, New Delhi-
110019.
Also at: 5th Floor, Punj Essen House, 17-18, Nehru Place, New Delhi-
110019.
Also at: 270, Sant Nagar, New Delhi
4. Offence complained of Section 138 of the Negotiable Instruments Act, 1881
5. Plea of the accused Pleaded not guilty and claimed trial
6. Final order Accused No. 1 is convicted Accused No. 2 is already abated vide order dated 31.03.2022 Accused No. 3 is already acquitted vide order dated 07.10.2022
7. Date of institution 14.10.2016
8. Date of reserving the 14.08.2024 judgment
9. Date of pronouncement 22.08.2024
-:JUDGEMENT:-
1. The present complaint under section 138 Negotiable Instruments Act, 1881 (herein referred to as NI Act) has been filed by the complainant company M/s Mangal Murti Exim Pvt Ltd (hereinafter referred to as the 'complainant') against M/s I Sustain Energy Pvt Ltd (hereinafter 'accused No. 1'), Sh.
Gaurav Rampal (hereinafter 'accused No. 2') and Sh. Vinod Kumar Ahuja (hereinafter 'accused No. 3').
Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Digitally Page No.2 of25 AAKASH signed by SHARMA AAKASH SHARMA
2. Briefly stated, the case of the complainant company is that accused no. 2 & 3 on behalf of accused no. 1 company had approached the complainant company and its Directors Sh. Gyanander Bansal and Sh. Girish Bansal expressing their company's desire and intent to take on lease complainant's shed premises bearing Unit No. E-347, admeasuring 4047 Sq. mts. Situated at Udyog Kendra-II, Eco Tech-III, Greater Noida (UP) for their company's business purposes. That after meetings, discussions and deliberations etc, the complainant conceded to give them on lease its said premises on agreed rental terms duly mentioned in writing for a period of 5 years w.e.f. 15.02.2015 at monthly rentals Rs. 4,35,000/- (excluding service Tax) payable by 7th day of each month. That accordingly, a registered Lease Agreement dated 30.03.2015 stood executed between accused no. 1 company (through accused no. 3 Sh. Vinod Kumar Ahuja, Director in the presence of and with the knowledge, consent and concurrence of accused no. 2 Sh. Gaurav Ram Pal, Principal Director) and the complainant on 30.03.2015. That however, from inception itself, accused no. 1, 2 & 3 have been negligent in compliance with the lease terms and there has been delay and default on their part in tendering the lease rentals in time. Consequently, there has always remained one or the other substantial amounts due, outstanding and payable by accused persons. That on the subsequent requests and pleadings of accused no. 2 and 3, the complainant, at earlier juncture, had not initiated for their prosecution and had relied upon the assurances advanced by accused no. 2 and 3 and conceded to accept their freshly issued PDC cheques with grant of time to clear their accrued liability. That later vide letter dated 26.04.2016, the Digitally AAKASH Page No.3signed Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd of25 by SHARMA AAKASH SHARMA accused persons had acknowledged their liability and outstanding payable to complainant for the financial year 2015-16 in the sum of Rs. 22,70,579/- and inter-alia had issued following four cheques i.e. cheque bearing no. 000418 dated 21.05.2016 for an amount of Rs. 4,27,615/- qua first installment, no. 000419 dated 05.06.2016 for an amount of Rs. 4,60,741/- qua second installment, no. 000421 dated 05.07.2016 for an amount of Rs. 4,60,741/- qua third installment and no. 000423 dated 05.08.2016 for an amount of Rs. 4,60,741/- qua fourth installment. That besides the above, five further cheques of Rs. 4,77,304/- each were also then collectively issued and given by the accused persons on 26.04.2016 towards their liability for rentals with respect to the months of April / May/ June/ July/ August, 2016 to the complainant towards they being in user and occupation of the subject leased out premises:-
i. Rent for the month of April 2016, Rs. 4,77,304/- vide cheque no. 000416 dated 21.05.2016. ii. Rent for the month of May 2016, Rs. 4,77,304/- vide cheque no. 000417 dated 21.05.2016. iii. Rent for the month of June 2016, Rs. 4,77,304/- vide cheque no. 000420 dated 05.06.2016. iv. Rent for the month of July 2016, Rs. 4,77,304/- vide cheque no. 000422 dated 05.07.2016. v. Rent for the month of August 2016, Rs. 4,77,304/- vide cheque no. 000424 dated 05.08.2016.
That while issuing all aforementioned nine cheques, it was duly assured and represented by accused no. 2 and 3 that all their abovesaid cheques are good for payment and there shall be no Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.4 of25 Digitally AAKASH signed SHARMA by AAKASH SHARMA delay, neglect or default on their part in honouring the same on their respective due dates or any time thereafter and further that same could be put in for clearance either jointly or separately any time by the complainant. However, all the aforesaid cheques stood dishonoured and the accused had not cleared their acknowledged liability, thus still leaving entire said amount still outstanding. However, the present complaint is only with regard to the following four cheques out of above nine cheques which the accused had drawn, given and issued to the complainant towards part discharge of its legal debt and liability towards rentals for the period the premises admittedly remained in occupation and possession by the accused company. All the subject four cheques hereunder are issued under the signatures of accused no. 2 and 3 for accused no. 1 company:-
Cheque no. Date Amount Drawn on
000421 05.07.2016 4,60,741/- HDFC Bank, B.K Dutt Market,
Rajouri Garden, New Delhi-110027
000422 05.07.2016 4,77,304/- HDFC Bank, B.K Dutt Market,
Rajouri Garden, New Delhi-110027
000423 05.08.2016 4,60,741/- HDFC Bank, B.K Dutt Market,
Rajouri Garden, New Delhi-110027
000424 05.08.2016 4,77,304/- HDFC Bank, B.K Dutt Market,
Rajouri Garden, New Delhi-110027
That since same relating to the same nature and cause of action, it was represented by accused no. 2 and 3 to the complainant that all said cheques could be presented for encashment by complainant, either on their respective due dates collectively or at any time thereafter or even separately as well. That the aforementioned cheques were dated July / August 2016, however, on the request made by accused no. 2 and 3 to the complainant citing financial constraints, the complainant being in a fix due to earlier continuing default of the accused, it was Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.5Digitally of25 signed AAKASH by SHARMA AAKASH SHARMA constrained to wait for some days on the assurance given that against same, the accused shall tender requisite corresponding pay orders. That, however, no payment stood made by any of the accused persons and consequently after waiting for some days and as confirmed by the accused no. 2 and 3, the aforesaid subject four cheques stood presented by the complainant with its bankers namely Bank of India, New Friends Colony, New Delhi Branch on 03.09.2016 collectively but to the utter shock and dismay, all said cheques have since been returned back unpaid and dishonoured on 06.09.2016 for the reasons "Funds Insufficient". The details and particulars of dishonouring are as under:-
Cheque No. Date Amount Presentation Dishonoured Return memo Reason on on 000421 05.07.2016 4,60,741/- 03.09.2016 06.09.2016 06.09.2016 Funds Insufficient 000422 05.07.2016 4,77,304/- 03.09.2016 06.09.2016 06.09.2016 Funds Insufficient 000423 05.08.2016 4,60,741/- 03.09.2016 06.09.2016 06.09.2016 Funds Insufficient 000424 05.08.2016 4,77,304/- 03.09.2016 06.09.2016 06.09.2016 Funds Insufficient That dishonour of said four cheques qua single transaction and forming part of the one lease deed and common cause of action manifest utter breach of contract and of committed obligations by the accused persons and there has occasioned severe default on their part in clearing acknowledged rental liability due to the complainant. That when these cheques were given and their due dates accrued and same got bounced. That the accused no. 2 and 3 were the Principal Directors of the accused no. 1 company and they still are Principal In-charge of the accused no. 1 company and responsible for each daily conduct of its business and even on dishonour dates i.e. at the time of commission of offence, they being the working minds behind the accused no. 1 company and bouncing done with their consent Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.6 of25 Digitally AAKASH signed by SHARMA AAKASH SHARMA and connivance. That the accused no. 1, 2 and 3 issued the above cheques against valuable consideration and in discharge of rental liability towards premises used, knowing fully well that there was sufficient or sizable balance in the account maintained with company's bankers to honour the abovestated cheques on assured due dates. That after the dishonour of the said cheques, complainant tried to contact both accused persons no. 2 and 3 on phone but for the malafide reasons they remained elusive and unapproachable. That the accused no. 1, 2 and 3 miserably failed to maintain sufficient credit balance in their bank account on the drawn dates of the subject four cheques as well as on the assured dates when they respectively came for clearance in their bank. Accused persons failed to maintain financial discipline and did not ensure to keep adequate funds on due payment dates of cheques or even thereafter. That since there was total inaction and default on the part of both the Directors, complainant was constrained to issue and serve upon all three accused persons with legal demand notice dated 14.09.2016 under Section 138 NI Act and vide same, accused persons were given 15 days time and were demanded to clear their liability and pay amounts qua the subject dishonoured four cheques totaling Rs. 18,76,090/-. That the said notice was sent to all the three accused persons at their various addresses available, both by speed post on 14.09.2016 as well as by e-mail on 17.09.2016 and same stood served upon accused persons on 17.09.2016. In fact, off-late, some more addresses of the accused company and accused no. 2 and 3 (Directors) also came to the knowledge of the complainant and accordingly, a true copy of the said notice dated 14.09.2016 also stood sent later on 21.09.2016 and duly served upon the accused Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.7 of25 Digitally AAKASH signed by SHARMA AAKASH SHARMA persons by way of speed post as well as another e-mail on said additional addresses as well on & about 21.09.2016 / 22.09.2016 and no envelopes came back.
3. Hence, the present complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') was filed.
4. On issuance of summons vide order dated 11.01.2017, the accused No. 2 and 3 entered appearance in the present matter for the first time on 30.03.2017 and accused No. 2 & 3 were admitted to bail on the same day. Notice u/s 251 Cr.P.C. was served upon accused No. 3 on 10.11.2017, to which accused no. 3 pleaded not guilty and claimed trial and plea of defence was also recorded. Notice under Section 251 Cr.P.C. was served upon accused no. 1 and 2 on 25.02.2019 to which accused no. 1 and 2 pleaded not guilty and claimed trial. Thereafter, matter was kept for CE. During the course of the proceedings, accused no. 2 was abated as per order dated 31.03.2022. Whereas vide order dated 07.10.2022, accused no. 3 was acquitted with the consent of the AR of the complainant upon application under Section 147 NI Act r/w 320 Cr.P.C. Matter against accused no. 1 proceeded for CE, however, no Board Resolution was filed for appointing new AR for accused no. 1 despite it being warned on 18.07.2022 by the Ld. Predecessor that proceedings shall be held in-absentia against the accused no. 1 upon failure to do so. Thereafter vide order dated 06.02.2024, accused no. 1 was proceeded against in- absentia and last and final opportunity was granted to accused no. 1 to cross-examine CW-1 on NDOH. On 02.04.2024, since opportunity granted for cross-examination was not availed on Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.8 Digitally of25 AAKASH signed SHARMA by AAKASH SHARMA behalf of accused no. 1, CE was closed. Statement of accused no. 1 under Section 313 Cr.P.C. was dispensed vide order dated 13.05.2024 as accused no. 1 was in-absentia and matter was kept for final arguments. Final arguments were heard on 14.08.2024.
Written submissions filed on behalf of the complainant were taken on record and matter was reserved for judgment.
EVIDENCE:-
5. In order to support its case, the AR of the complainant had stepped into the witness box as CW-1 and tendered his evidence on 11.01.2017 by way of an affidavit which is Ex.CW1/A into evidence wherein averments made in the complaint were reiterated. CW-1 relied upon various documents such as:
(a) Copy of certificate of Incorporation of the complainant company as Ex.CW1/1;
(b) Original Board Resolution of the complainant company as Ex.CW1/2;
(c) Original authority letter of the AR of the complainant company as Ex.CW1/3;
(d) True copy of the Lease Agreement dated 30.03.2015 as Ex.CW1/4 (OSR);
(e) True copy of the payment acknowledgment letter dated 26.04.2016 from accused no. 1, 2 and 3 to the complainant as Ex.CW1/5;
(f) Cheques bearing no. 000421 dated 05.07.2016 for Rs.
4,60,741/-, no. 000422 dated 05.07.2016 for Rs. 4,77,304/-, no. 000423 dated 05.08.2016 for Rs. 4,60,741/- and no. 000424 dated 05.08.2016 for Rs. 4,77,304/- as Ex.CW1/6, Ex.CW1/7, Ex.CW1/8 and Ex.CW1/9 Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.9 of25 Digitally AAKASH signed by SHARMA AAKASH SHARMA respectively;
(g) Return memo for the cheques in question dated 06.09.2016 as Ex.CW1/10;
(h) Bank Statement of account of the complainant for the period 01.08.2016 to 05.10.2016 as Ex.CW1/11;
(i) True copy of the legal demand notice dated 14.09.2016 through Speed Post/ Regd. A/D as well as through e- mail as Ex.CW1/12 & Ex.CW1/13;
(j) Speed post receipts of India Post and Tracking receipts as Ex.CW1/14 (Colly);
(k) True copy of an earlier e-mail received from accused persons dated 01.07.2016 towards re-acknowledgment of their liability to the complainant as Ex.CW1/15;
6. In the present case, the opportunity of cross-examination of CW-1 was never availed on behalf of the accused no. 1 despite several opportunities since matter against accused no. 1 had proceeded for CE, however, no Board Resolution was filed for appointing new AR for accused no. 1 despite it being warned on 18.07.2022 by the Ld. Predecessor that proceedings shall be held in-absentia against the accused no. 1 upon failure to do so. Thereafter vide order dated 06.02.2024, accused no. 1 was proceeded against in-absentia and last and final opportunity was granted to accused no. 1 to cross-examine CW-1. On 02.04.2024, since opportunity granted for cross-examination was not availed on behalf of accused no. 1, CE was closed. Statement of accused no. 1 under Section 313 Cr.P.C. was dispensed vide order dated 13.05.2024 as accused no. 1 was in-absentia and matter was kept for final arguments. Final arguments were heard on 14.08.2024.
Digitally Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.10 AAKASH of25 signed by SHARMA AAKASH SHARMA Written submissions filed on behalf of the complainant were taken on record and matter was reserved for judgment.
APPLICABLE LAW:-
7. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed.
Now, Section 138 Negotiable Instrument Act provides as under:
Section 138. Dishonour of cheque for insufficiency, etc., of funds in the account. Where any cheque drawn by a person 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 debt or other liability, is returned by the bank unpaid, either because of 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 that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless (a) the cheque has been presented to the bank within a period of six months (reduced to three months vide notification no. RBI/201112/251, DBOD AMLBCNo. 47/19.01.0062011/12,dated 04.11.2011) from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation -- for the purposes of this section, "debt or other liability"
Digitally Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.11 of25 AAKASH signed by SHARMA AAKASH SHARMA means a legally enforceable debt or other liability. It is well settled position of law that to constitute an offence under S.138 N.I. Act, the following ingredients are required to be fulfilled: (1) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability; (2) cheque has been presented to the bank within a period of six months (now three months) from the date on which it is drawn or within the period of its validity whichever is earlier; (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 30 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the N I Act.
The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption under Section 139, that the holder of cheque receiving the same of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in Basalingappa v. Mudibasappa, AIR 2019 SC 1983, noted at para 23 as follows [Bharat Barrel and Drum Manufacturing Company v. Amin Chand Pyarelal, (1999) 3 SCC 35; M.S. Narayana Menon alias Mani v. State of Kerala and another, (2006) 6 SCC 39; Krishna Janardhan Bhat v.
Dattatraya G. Hegde, (2008) 4 SCC 54; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Rangappa v. Sri Mohan, (2010) 11 SCC 441 referred]:
(i) Once the execution of cheque is admitted, Section Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.12 of25 Digitally AAKASH signed by SHARMA AAKASH SHARMA 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposes an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to support his defence.
To put in nutshell, the law regarding the presumption for the offence under Section 138 N.I. Act,is that the presumptions under Sections 118(a) and 139 have to be compulsorily raised as soon as execution of cheque by the accused is admitted or proved by the complainant and thereafter burden is shifted upon the accused to prove otherwise. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The onus to prove the issuance of the cheque lies upon the complainant, and the same has to be proved beyond reasonable doubt, unless the accused admits the same. Once the issuance of cheque is established, either by admission or by positive evidence, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises. We can summarize the general principles in the following way:
Onus of proof: Section 139 of the Negotiable Instruments Act, 1881 states that it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque, of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Therefore, here the onus shifts upon the accused to prove the nonexistence of debt or other liability. Section 139 of the N.I. Act uses the word "shall Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.13 of25 Digitally AAKASH signed by SHARMA AAKASH SHARMA presume", which means that the presumption under Section 139 is rebuttable.
Standard of proof: The standard of proof required to rebut the presumption under Section 139 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 other liability, the onus shifts back to the complainant to prove by way of evidence, beyond reasonable doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debt or other liability, and now the presumptions under Section 118 (a) and Section 139 will not come to the aid of the complainant.
Mode of Proof: The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration, and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should prove the nonexistence of the consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that a bare denial of passing of consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances upon the consideration of which, the Court may either believe that the consideration and debt did not exist, or their nonexistence was so probable that a prudent man would, under circumstances of the case, act upon the plea that they did not exist.
As discussed above, from the legal provisions and the law laid down in various judgments, it can be safely gathered that it is for the accused to rebut the presumptions. He can do so by cross examining the complainant, leading defence evidence, thereby demolishing the case of the complainant. It is amply clear that the accused does not need to discharge his or her liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the complainant. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore the prosecution cannot stand. In this situation the Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.14 of25 Digitally AAKASH signed by SHARMA AAKASH SHARMA accused has nothing to do except to point inherent inconsistency in the version of the complainant or the accused can give his version of the story and say that on the basis of his version the story of the complainant cannot be believed.
ARGUMENTS AND APPRECIATION OF EVIDENCE:-
8. Ld. Counsel for the complainant has argued that all the requirements of Section 138 NI Act have been met with in the present case and hence, the accused no. 1 be convicted. I have heard the arguments and also gone through the record with due circumspection.
9. Ld. Counsel for the complainant has submitted vide written submissions that originally the complaint was filed against three accused persons namely (i) accused no. 1 company through its Managing Director /AR; (ii) Director Sh Gaurav Ram Pal and (iii) Director; Sh. Vinod Kumar Ahuja. That subject cheques in questions are issued, drawn and given by accused no. 1 company and bear signatures of accused no. 2 and 3. However, during the pendency of the case proceedings, accused no. 2 got expired and accordingly proceedings qua accused no. 2 were abated vide order dated 31.03.2022. Thereafter, vide order dated 07.10.2022, proceedings qua accused no. 3 stood compounded and accused no. 3 was acquitted. That consequently at present, the complainant proceedings are been pursued against accused no. 1 company, who is being proceeded against in-absentia by Hon'ble Court vide order dated 06.02.2024; followed by closure of the right of accused no. 1 company to cross examine CW-1 vide order dated 02.04.2024; further followed by order dated 13.05.2024 whereby the court observed that statement under Section 313 Cr.P.C. cannot be recorded as accused no. 1 is in-
Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.15 of25 Digitally AAKASH signed by SHARMA AAKASH SHARMA absentia under Section 305(4) Cr.P.C. That it is prayed that accused no. 1 be convicted under Section 138 NI Act.
10. On the other hand, the defence of accused no. 1 was recorded through its then AR i.e. accused no. 2 as per notice framed under Section 251 Cr.P.C. as per which, it was stated on behalf of accused no. 1 and 2 that "I was the Director of accused no. 1 company at the time of issuance of cheques and also one of the signatories of the impugned cheques. I had given the impugned cheques to accused no. 3 Sh. V.K. Ahuja for advance rental payments of the premises of the complainant. I did not receive legal notice." Whereas, the accused no. 3 as per notice framed under Section 251 Cr.P.C. had stated as Director of accused no. 1 that "I am the Director of accused no. 1 company and also one of the signatories of the impugned cheques. On the date the impugned cheques were presented for encashment, there was no debt or liability towards the complainant and the premises were also handed over to the landlord (the complainant). I was never incharge and responsible for day to day affairs of the company. I received the legal notice."
11. The three-Judge Bench of Hon'ble Supreme Court in Rangappa Vs. Sri Mohan, (2010) 11 SCC 441 has held that:
"where the fact of signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttable nature and the onus is then on the accused to raise a probable defence."
12. In the present case, the accused no. 2 and 3 had not denied their signatures on the cheques in question issued on behalf of Digitally Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.16signed of25 AAKASH SHARMA by AAKASH SHARMA accused no. 1 company in the notice framed under Section 251 Cr.P.C. Accused no. 2 admitted issuing the cheques in question on behalf of accused no. 1 and handing them to accused no. 3 for advance rental payments of the premises. Whereas accused no. 3 admitted his signatures on the cheques question, however, stated that on the date when the cheques in question were presented for encashment, there was no debt or liability towards the complainant.
Thus, the factum of signatures on the cheques is not disputed and has been acknowledged in the statement of accused no. 2 and 3.
13. It is pertinent to mention here that Section 139 only raises the presumption on fulfillment of its conditions that the cheque was issued for discharge of in whole or in part any debt or other liability but there is no presumption as to the existence of the debt or liabilty as such. In Rangappa (supra) it has been held that :
"Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability."
14. As regards the legal notice, the receipt of the same has been denied by the accused no. 1 and 2 in the statement under Section 251 Cr.P.C. However, the receipt of the legal demand notice has been admitted by accused no. 3 in his statement under Section 251 Cr.P.C. As per provisions of Section 114 of Indian Evidence Act, 1872, read with Section 27 of General Clauses Act, the court may presume that legal notice duly addressed to the accused persons and dispatched to them by way of post was Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.17 Digitally of25 AAKASH signed by SHARMA AAKASH SHARMA actually received by the accused persons, regard being had to common course of natural events. Reliance is also placed upon the case of C C Alavi Haji v. Palapetty Muhammed [2007 (6) SCC 555] wherein it was held by the Hon'ble Supreme Court that:
"it is also to be borne in mind that the requirement of giving of notice is a clear 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 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 alongwith the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of General Clauses Act and Section 114 of Indian Evidence Act."
Apparently, the legal demand notice was addressed to the accused no. 1 on its registered address Plot No. 106, Anupam Plaza, Local Shopping Complex, Ghazipur, New Delhi-110096. This address of accused no. 1 is mentioned on the registered lease deed as well as on the certificate issued by the Ministry of Commerce and Industry, Officer Zonal Director General of Foreign Trade.
Hence, in my opinion, legal notice was duly served upon the accused no. 1.
15. As regards to the fact of dishonor of the cheques in question, the return memo filed by the complainant clearly shows Digitally Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd signed Page No.18 of25 AAKASH SHARMA by AAKASH SHARMA that the cheques in question were dishonored for the reasons "Funds Insufficient". In the case at hand, neither any argument has been raised on behalf of the accused No. 1 to dispute the dishonor of the cheques nor this fact has been denied at any stage of the matter. Thus, taking into account that dishonor of cheques is not disputed, this fact, also stands proved.
16. Thus, the presentation of the cheques in question, its dishonor and service of legal notice is not under question. Consequently, the complainant has successfully raised a presumption under Section 139 NI Act.
17. Accordingly, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused No. 1 to establish a probable defence so as to rebut such a presumption.
18. In the segment on legal framework, set out above, the legal proposition with respect to the burden of proof upon the accused has already been discussed. Hence, it is now to be examined as to whether the accused brought any material on record or pointed out glaring discrepancies in the material produced by the Complainant for dislodging the presumption which meets the standard of preponderance of probabilities.
19. In the present matter, the cheques in question were issued on behalf of the accused no.1 admittedly towards the rents payable to the complainant. This is clear from the Ex.CW-1/5 i.e. an acknowledgement of the cheques in question having been Digitally Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.19signed AAKASH of25 SHARMA by AAKASH SHARMA issued as advance rental payment of the premises to the complainant. Ex.CW-1/5 is drawn on the letter head of the accused no.1 company and addressed to the Director of the complainant and also states that same is being issued in response to the legal notice sent by the complainant dated 07.04.2016. Ex.CW-1/5 is dated 26.04.2016 and the cheques in question bearing nos. 000422 & 000424 are admittedly for the rent for the months of July & August, 2016. Whereas the cheques in question bearing nos. 000421 & 000423 are towards the payment of the outstanding rents for the financial year 2015-16 which are payable in four installments. Admittedly, accused no.1 is the tenant of the complainant vide registered lease agreement Ex.CW-1/4 dated 30.03.2015. Significantly, during statement recorded under Section 251 Cr.P.C, accused no.1 (through accused no.2) and accused no.2 have stated that the cheques in question which were given to accused no.3 were qua advance rental payments of the premises of the complainant. The signatures of accused no.2 on the cheques drawn on behalf of accused no.1 were admitted in the statement under Section 251 Cr.P.C. Also, the signatures of accused no.3 on the cheques in question were admitted by the accused no.3 in the statement under Section 251 Cr.P.C. The defence taken by the accused was that on the date of the presentation of the cheques in question were encashment there was no debt or liability towards the complainant. It thus appears that the defence of the accused is that the cheques in question i.e. 000422 & 000424 were security cheques for the payment of the rents which were issued in advance. Whereas, the cheques no. 000421 & 000423 were issued qua the arrears of rent i.e. outstanding for the financial Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.20 of25 Digitally AAKASH signed by SHARMA AAKASH SHARMA year 2015-16 as security cheques which may be presented for payment on or after the date fixed therein.
20. The law pertaining to cheque issued as security has now been settled by the Hon'ble Supreme Court in Sripati Singh Vs. State of Jharkhand and Anr, 2021 SCC Online SC 1002, wherein the Hon'ble Supreme court has held that;
"A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured,the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow. When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is issued as security. Further, the borrower Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.21 of25 Digitally signed AAKASH by SHARMA AAKASH SHARMA would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in a proceedings initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an 'on demand promissory note' and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation."
The present case pertains to the cheques in question bearing nos. 000422 & 000424 which as per the defence of the accused no.1 were given on behalf of the accused persons as security cheques for advance payment of due rent for the months Digitally Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.22 of25 AAKASH signed SHARMA by AAKASH SHARMA July & August of 2016 and for cheques in question bearing nos. 000421 & 000423 as security cheques for the outstanding rent for financial year 2015-16, vide written communication addressed to complainant dated 26.04.2016 which is Ex.CW1/5 wherein it is categorically mentioned that the 02 PDCs nos. 000422 & 000424 are for the rents payable on the date of the cheques i.e. 05.07.2015 & 05.08.2016 respectively, whereas 02 PDCs nos. 000421 & 000423 are for the installments of outstanding rent payable on the date of the cheques i.e. 05.07.2016 & 05.08.2016 respectively. It thus appears that if payment qua the aforesaid cheques is not paid by any other mode by the accused no.1 prior to the date of the cheques, then in that case the complainant shall be at liberty to encash the PDCs on or after the dates mentioned on the cheques. Except making a bald assertion in the statement under Section 251 Cr.P.C., accused no.1 has not brought on record any proof of payment qua these cheques by any other mode either before or after the date of the cheques, nor brought on record any separate agreement or proof of understanding with the complainant so that complainant does not present the cheques in question for payment. In these circumstances, it was incumbent upon the accused persons No. 1 to arrange sufficient balance in the account of accused No. 1 to honour the PDCs in question which were to be presented subsequent to the date of the cheques which dates are also mentioned on the cheques and also mentioned on Ex.CW1/5.
21. It is a settled position that the accused has to rebut the presumption raised under Section 139 and the standard of proof of which is 'preponderance of probabilities'. It is for the accused Ct. Case No. 635974/2016 Page Digitally M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd No.23 of25 AAKASH signed by SHARMA AAKASH SHARMA to raise a probable defence which creates a doubt on the version of the complainant. The accused no. 1, in the present matter has been unsuccessful in creating a doubt on the version of the complainant. The accused no. 1 has failed to place on record any documentary proof or other credible evidence which could support its side of the story. Accused no.1, which was being represented by accused no.2 remained in-absentia after the abatement of proceedings against accused no.2 vide order dated 31.03.2022. Vide order dated 06.02.2024, this court formally proceeded in-absentia under Section 305 (4) Cr.P.C. against the accused no.1 company as no steps had been taken for appointing an authorized representative for accused no.1 company qua present proceedings. Despite several opportunities to accused no.1 to cross-examine the complainant, same was not availed, due to which right to cross-examine CW-1 on behalf of the accused no.1 company was closed vide order dated 02.04.2024. Statement under Section 313 Cr.P.C. of accused no.1 company was dispensed vide order dated 13.05.2024 as proceedings were conducted in-absentia against accused no.1 under Section 305(4) Cr.P.C.
On the other hand, the complainant company has supported its case by placing on record documentary and other evidences which could not be entirely rebutted by the accused no.1 company. In a nutshell, the complainant company has been successful in proving its case beyond reasonable doubt.
CONCLUSION:-
22. This court finds that accused No. 1 company is liable to be convicted as accused no.1 company has been unable to rebut the presumption raised against it under section 139 NI Act and is, Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Digitally Page No.24 of25 signed AAKASH by SHARMA AAKASH SHARMA therefore, liable to be convicted.
DECISION:-
23. Resultantly, the accused no.1 company i.e. I Sustain Energy Pvt. Ltd. is convicted for the offence under section 138 of NI Act.
Announced in the open court today on 22nd August, 2024.
This judgment contains 25 pages all are signed by me. A copy of this judgment be placed on the official website of the District Court.
Digitally AAKASH signed by SHARMA AAKASH SHARMA (AAKASH SHARMA) Metropolitan Magistrate-03 (NI Act) South-East, Saket Courts, New Delhi.
Ct. Case No. 635974/2016 M/s Mangal Murti Exim Pvt Ltd Vs. M/s I Sustain Energy Pvt Ltd Page No.25 of25