Delhi District Court
Cc No. 50742/16 Bharat Hotels Ltd vs . Rdg Interior Decroration Exterior ... on 17 September, 2021
IN THE COURT OF ANSHUL SINGHAL
MM03 (NI ACT): PHC: NEW DELHI
In the matter of: CC No.: 50742/16
M/s Bharat Hotels Ltd.
Through Mr. Ravi Gupta,
Authorized Representative
Barakhamba Lane,
New Delhi110001 ......Complainant
versus
1. M/s RDG Inerior Decoration Exterior
Architecture Pvt Ltd.
Through its Director Mr. Sagar Nag Roy
Having its Corporate Office at 344/4,
NSC Bose Road Kolkata700047
2. Mr. Sagar Nag Roy -Director
M/s RDG Inerior Decoration Exterior
Architecture Pvt Ltd.
Having its Corporate Office At 344/4,
NSC Bose Road, Kolkata -700047
Also At : 329, Ganguly Bagan,
Krishna Bhavan, Kolkata 700047 ........Accused
Date of Institution of Complaint : 22.09.2014
Offence Complained of : u/s 138 N.I. Ac
Plea of Accused : Not Guilty
Date of Final Arguments Heard : 31.03.2021
Decision : Acquitted
Date of Decision : 17.09.2021
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JUDGMENT
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. By this judgment, I will dispose of the present complaint U/s 138 of N.I.Act, 1881 filed by the complainant against accused on account of dishonour of cheque bearing no. 439507 dated 06.08.2014 for a sum of Rs. 50,00,000/ drawn on the Punjab and Sind Bank, Hemkunt Colony Guru Nanak Market Branch, Greater KailashI, New Delhi 110048 issued by the accused in favour of the complainant (hereinafter referred to as the cheque in question).
2. Brief facts of the case as per the complaint are that complainant is in Hotel Business and other hospitality related services/facilities to its customers in its hotels at Delhi and other locations. The complainant had executed four works contracts and a supplementary contract with accused no. 1 which was represented by its directors namely accused no. 2 for execution of certain interior works at complainant's proposed hotel at Manger, Faridabad, Haryana. The entire work was to be done by the accused persons for Rs. 6,52,50,745/ within 6 months i.e. till and Rs. 1,07,14,989/ was paid by the complainant as mobilisation advance to the accused. This mobilisation advance was given by the complainant against undated cheques issued and signed by the accused no. 2 on behalf of accused no. 1 which were given as corporate guarantee.
3. It is further the case of the complainant that after 6 months, when the representatives of the complainant went for site inspection the work had not been done by the accused as per terms and conditions of the contract and then the engineers/ officers found that the work only to the tune of Rs. 13,08,039/ has been executed by the accused against the mobilisation advance. That despite repeated reminders, the accused failed to execute the contract and the CC No. 50742/16 Bharat Hotels Ltd Vs. RDG Interior Decroration Exterior Architecture Pvt Ltd. & Anr Page No. 2 of 10 complainant was forced to terminate the contracts vide termination letter dated 19.06.2014 and the accused was asked to return the unutilized and unadjusted mobilisation advance of Rs. 94,14,150/ within 10 days of the receipt of notice. Complainant has further stated that the accused did not return the above stated amount and after further reconciliation and finalisation of accounts of the accused by the complainant, the excess amount for which no work was done stood at Rs. 79,51,021.73/. It is the case of the complainant that, for the refund / return of this amount, the accused issued the cheque in question of Rs. 50,00,000/ and promised to pay the balance amount later on.
4. A notice explaining the accusation to the accused U/s 138 of N.I. Act was served on 23.05.2016 and his plea was recorded. Accused did not plead guilty and he claimed trial. Accused had taken the defence that the cheque was issued as a security cheque against further mobilisation funds. During CE, AR of the complainant was substituted and he filed fresh evidence affidavit and relied upon the following documents:
(i) Copy of certificate of incorporation is ExCW1/1.
(ii) Copy of Board Resolution and letter of authority are ExCW1/2 & ExCW1/3.
(iii) True copy of works contracts are ExCW1/4 to ExCW1/8
(iv) True copy of corporate Guarantees with enclosures are ExCW1/9 to ExCW1/15.
(v) Termination letter dated 19.06.2014 with reply are ExCW1/16 to ExCW1/17.
(vi) True copy of statement of account is ExCW1/18(Colly).
(vii) Reconciliation statement are ExCW1/19.
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(viii) Cheque and the returning memo with bank statement are Ex CW1/20 to ExCW1/22.
(ix) Copy of legal notice dated 22.08.2014 is ExCW1/23.
(x) Original postal receipts and AD cards are ExCW1/24(colly) and ExCW1/25 respectively.
(xi) Complaint is ExCW1/26.
5. CW1 was duly crossexamined by counsel for accused and vide separate statement of the AR of the complainant dated 22.04.2019 the CE was closed.
6. Accused was thereafter examined U/s 281 r/w Sec 313 Cr.P.C on 24.07.2019, putting entire incriminating evidence against him. During examination of accused U/s 281 r/w Sec 313 Cr.P.C, he stated that the cheque in question was given as replacement of non CTS cheque bearing no. 784924 for an amount of Rs. 37,83,669/ as security against mobilisation fund. Since the accused chose to lead evidence in his defence, matter was adjourned for DE.
7. Accused No.2 has examined himself as DW1 after his application U/s 315 Cr.P.C was allowed by this court. The following documents were placed on record by DW1 in support of accused persons case:
(i) Letter Correspondence from complainant to the accused which is ExDW1/1 (OSR).
8. DE was closed on 17.01.2020 and the matter was adjourned for final arguments. Final arguments were heard by this court on 10.02.21 and 15.03.21.
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9. I have heard counsel for the parties, perused the record and have gone through the relevant provisions of the law.
10.At the very outset, it is pertinent to lay down the ingredients of the offence under section 138 of NI Act. The following are the components of the offence punishable under Section 138 of Negotiable Instrument Act: (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) presentation of the cheque by the payee or the holder in due course to the bank, (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.
Ld. Counsel for the complainant has argued that the ingredients of the offence u/s 138 NI Act are made out and the complainant has shown that by CC No. 50742/16 Bharat Hotels Ltd Vs. RDG Interior Decroration Exterior Architecture Pvt Ltd. & Anr Page No. 5 of 10 leading evidence which is Ex. CW1/4 to CW1/8 alongwith Ex. CW1/9 to CW1/15 which are works contract executed between the parties and corporate guarantees issued by accused in favour of the complainant showing that advance was given to the accused by the complainant. The complainant has also relied upon Ex. CW1/18 which is the statement of account of the accused in the books of the complainant to further the point that advance was given by the complainant to the accused. The complainant has further relied on the termination letter and reply to the termination letter which is Ex. CW1/16 and CW1/17 respectively.
The complainant has further relied upon Ex. CW1/20 which is the cheque in question, Ex. CW1/21 which is the return memo, Ex. CW1/23 which is the legal notice, CW1/24 which are the postal receipts and CW1/25 which are AD receipts.
Ex. CW1/4 to Ex. CW1/15 alongwith Ex. CW1/16 to CW1/18 prima facie show that there was existence of legally enforceable debt or liability. Ingredients listed at point (2), (3), (4) and (5) are stated to be proved by Ex. CW1/20 to Ex. CW1/25.
Defence of the accused
11.Ld. Counsel for the accused has argued that all the work was done and as per the letter written by the complainant to the accused which is Ex. DW1/1, it was the complainant who owed approximately Rs. 7 Lacs to the accused as on 31.03.2014. The accused has taken a defence that the cheque in question was given only for security purposes for advance to be received from the complainant as mobilization advance.
12.Ld. Counsel for the accused has relied on Mark C/X/D1, which is a document submitted by the complainant at the time of institution of complaint as part of CC No. 50742/16 Bharat Hotels Ltd Vs. RDG Interior Decroration Exterior Architecture Pvt Ltd. & Anr Page No. 6 of 10 Ex. CW1/12. This document is a photocopy of cheque in question and another cheque bearing no. 784924 for an amount of Rs. 37,83,669/. The cheque bearing no. 784924 is stated to be given as security for advance against mobilisation fund and it is further the case of the accused that the cheque in question was given as replacement to this non CTS cheque bearing no. 784924. The cheque in question as appearing in Mark C/X/D1 is undated, however, the cheque in question as appearing in Ex. CW1/20 is dated with all the other details being the same. Ld. Counsel for the accused has compared both of these as proof of the fact that the cheque in question at the time when it was handed over to the complainant by the accused was undated. CW1 at the time of crossexamination has stated that Mark C/X/D1 was given by the accused to the complainant with a promise that he will deliver the cheque in question in original with date to the complainant within 23 days and the same was done.
13.Ld. counsel for the accused has further relied on Ex. DW1/1 which is a letter dated 30.04.2014 from the complainant addressed to the accused stating that as per the auditing of the financial statements done by the auditors it was found out that Rs. 7,01,223/ was payable by the complainant to the accused and it is also signed by a representative of the complainant company. This document has remained uncontroverted and hence, proved, in view of the fact that neither any crossexamination has been done in regard to the same nor any evidence has been led by the complainant to show otherwise.
14.Section 139 NI Act read with Section 118, NI Act creates a rebuttable presumption in favour of the complainant. According to Section 118 NI Act, until the contrary is proved, it shall be presumed inter alia that every negotiable instrument was made, drawn, accepted or endorsed for consideration. It is also CC No. 50742/16 Bharat Hotels Ltd Vs. RDG Interior Decroration Exterior Architecture Pvt Ltd. & Anr Page No. 7 of 10 presumed that, consideration is present in every negotiable instrument until the contrary is proved.
15.Furthermore, once the issuance of cheque is admitted by the accused/drawer, the presumption under Section 139 of the NI Act comes into play. As per the said Section 139 NI Act, 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.
16.It is the case of the accused that by the above two documents i.e., Mark C/X/D1 and Ex. DW1/1, the accused has been able to establish that the cheque in question given was undated and was given as security against advance of mobilisation funds and has been able to rebut the presumption under section 139 NI Act and it should be now on the complainant to prove its case.
17.At the very outset, it is pertinent to discuss the law laid down in Rangappa vs. Sri Mohan, (2010) 11 SCC 411, by the Hon'ble Supreme Court of India. It held that the presumption mandated by section 139 of NI Act does indeed include the existence of a legally enforceable debt or liability. It was further held that this is a rebuttable presumption. It was further held that the standard of proof required for rebutting this presumption 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. 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.
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18.It is a settled law that while considering a case under section 138 of NI Act it does not matter if the cheque given was for security purposes or not as per the law laid down in ICDS Ltd. vs. Beena Shabeer, (2002) 2 SCC 426 and Credential Leasing and Credits Ltd. vs. Shruti Investments and Anr., (2015) 223 DLT 343. The signatures on the cheque are admitted and even the particulars have been filled by the accused. The complainant has relied on Ex. CW1/18 and CW1/19 which are financial statement and reconciliation of accounts statement and has tried to show that Rs. 79,51,021.73/ were due to the complainant from the accused as the work was not done by the accused and he was bound to refund/return the unutilized mobilization advance.
19.In my considered opinion, the accused has been able to raise a probable defence primarily on the basis of Ex. DW1/1 wherein the complainant has itself stated that no amount is due from the accused to the complainant and in fact, an amount of Rs. 7,01,223/ is due from the complainant to accused as on 31.03.2014. The cheque is dated 06.08.2014. The complainant has failed to show how a liability of Rs. 50,00,000/ arose between 31.03.2014 and 06.08.2014. Ex. CW1/18 (Colly) is the Mobilisation Advance Ledger Account of the accused maintained in the books of the complainant from 01.04.2004 to 19.08.2014. There are various entries in the ledger pertaining to various transfers between the parties, however, there is no entry of any amount whatsoever between 01.04.2004 and 19.08.2014. As stated earlier also, Ex. DW1/1 has remained uncontroverted as no crossexamination was done and the document must be deemed to be admitted.
20.CW1 has maintained a stand during crossexamination that the cheque in question that was handed over to the complainant by the accused was complete CC No. 50742/16 Bharat Hotels Ltd Vs. RDG Interior Decroration Exterior Architecture Pvt Ltd. & Anr Page No. 9 of 10 in all particulars and Mark C/X/D1 is a photocopy of the same wherein the date has not been put. CW1 has stated that this photocopy was given by the accused to the complainant in advance twothree days prior to handing over of the cheques as a proof that original cheque complete in all particulars shall be handed over soon. After comparing the cheque in question as on Mark C/X/D1 and Ex. CW1/20, the accused has been able to cast a doubt that the cheque might have been undated when it was handed over to the complainant and as such was given as a security cheque against further mobilisation advance to be provided by the complainant to the accused.
Findings of this Court
21.Thus, in my considered opinion, the accused has been able to raise a probable defence and has been able to rebut the presumption under section 139 of NI Act on the basis of 'preponderance of probabilities'. The complainant has not been able to prove beyond reasonable doubt that the accused has committed an offence punishable under section 138 of NI Act.
22.In view of the aforesaid, accused no. 1, i.e. M/s. RDG Interior Decoration Exterior Architechture Pvt. Ltd. and accused no. 2 i.e. Mr. Sagar Nag Roy, director of accused no. 1 are hereby acquitted of offence under section 138 NI Act.
Digitally signed
ANSHUL by ANSHUL
SINGHAL
Announced in Open Court SINGHAL Date: 2021.09.17
16:31:04 +05'30'
on 17.09.21 (Anshul Singhal)
MM(N.I. Act)03/NDD/PHC/ND
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