Delhi District Court
Pradeep Kaushik vs . Virender Goel Etc. on 28 February, 2017
PRADEEP KAUSHIK vs. VIRENDER GOEL ETC.
IN THE COURT OF SH. GAGANDEEP SINGH, ADDITIONAL
CHIEF METROPOLITAN MAGISTRATE (SHAHDARA), KKD
COURTS DELHI.
New CC NO.617/2017
PS : Anand Vihar
U/S 138 Negotiable Instruments Act
SH. PRADEEP KAUSHIK ............. Complainant
vs.
SH. VIRENDER GOEL ............. Accused
a) ID No. of the case : 02402R0266682011
b) Date of Institution : 05.09.2011
c) Name of complainant : Sh. Pradeep Kaushik
S/o Sh. G.S. Sharma
R/o 172, 2nd Floor,
Pushpanjali, Delhi 110092.
d) Name & address of accused : 1. Sh. Virender Goyal
S/o Late J.P. Gupta
(expired)
2. Smt. Veena Goyal
D/o Late J.P. Gupta
R/o 8268, New Anaj
Mandi,
Bara Hindu Rao,
Delhi - 110006.
3. M/s Vimal Electrical
Industries
through its partners)
CC NO.617/2017 PS ANAND VIHAR PAGE 1/10
PRADEEP KAUSHIK vs. VIRENDER GOEL ETC.
At H1327, Narela
Industrial Complex, Delhi.
e) The offence complained of : U/S 138 N. I. Act
f) The plea of accused : Pleaded not guilty
g) Order reserved on : 06/02/2017
h) Final order : Acquittal
i) The date of pronouncement : 28/02/2017
JUDGEMENT
1. The complainant has alleged in the complaint U/S 138 N.I. Act that accused no.1&2 are the partners of M/s Vimal Electrical Industries and engaged in the business of manufacturing electrical cables and wires. Accused persons have taken financial assistance from the complainant towards the expansion of their business. The memorandum of understanding dated 13.07.2007 was also executed there upon. The accused persons then towards discharge of their liability jointly issued the cheque bearing no.769896 dated 10.01.2011 for Rs.35Lakhs drawn on Vijaya Bank, Chandni Chowk, Delhi. It ws assured that the cheque would be honoured on its presentation. The complainant accordingly presented the cheque for encashment but the same got dishonoured with the remarks "payment stopped by the drawer" vide memo dated 29.06.11. He thereupon contacted the accused persons and apprised about dishonour of the cheque but they failed to discharge their legal liability. Accordingly the complainant issued legal demand notice dated 18.07.2011 through registered A.D demanding payment of dishonoured cheque. As the accused failed to pay the amount of dishonoured cheque, CC NO.617/2017 PS ANAND VIHAR PAGE 2/10 PRADEEP KAUSHIK vs. VIRENDER GOEL ETC.
the complaint in question was filed.
2. On the basis of said complaint, complainant was examined and the accused was summoned to face trial vide order dated 24.09.2011. The notice U/S 251 Cr.P.C was served upon both the accused vide order dated 03.08.12 to which they pleaded not guilty and claimed trial accordingly, the complainant led his evidence and examined himself as CW1. He was extensively cross examined on behalf of accused. No other witness was examined on behalf of complainant.
3. Thereafter statement of accused was recorded U/S 313 Cr.P.C whereupon accused pleaded not guilty and claimed that the cheque in question has been issued as security and they have no liability to pay the dishonoured cheque amount.
4. I have heard counsel for the complainant and counsel for accused and have gone through the record carefully.
5. It was argued on behalf of the complainant that the presumption U/S 118 & 139 N.I. Act applies in the present case and accused have failed to rebut the said presumption. The plea of security cheque of the accused is liable to be rejected as memorandum of understanding Ex.CW1/A never talks about the same.
6. On the contrary, ld. Counsel for the accused has argued that the CC NO.617/2017 PS ANAND VIHAR PAGE 3/10 PRADEEP KAUSHIK vs. VIRENDER GOEL ETC.
cross examination of CW1 shows that the complainant has failed to explain the source of his income, the source of the advancement of the loan amount and has misused the security cheques.
7. The case of the complainant is based upon the execution of the MOU Ex.CW1/A which was signed by both the parties. As per said MOU, the complainant was supposed to make the investment to the tune of Rs.75Lakh in the business of accused. In return of the said investment, the complainant was supposed to get 50% of the profits. Further in case, the said agreement was cancelled by either of the parties, complainant was entitled to return of the said investment amount.
8. In the said back drop, it is the case of the complainant that he has invested Rs.75Lakh in the firm and the accused in discharge of the said liability issued dishonoured cheque in his favour. Thus the cheque was stated to be issued in legal discharge of the liability. The complainant also placed reliance upon the presumptions U/S 118 & 139 N.I. Act to support his case. The scope of said presumptions and the manner in which it can be rebutted has been explained by Hon'ble Supreme Court in judgment titled as Wilson Mathew vs. State NCT of Delhi & Anr. 224 (2015) DLT 291 and Para 39 of the same is reproduced as under : 'In K. Prakashan V.P.K. Surenderan, {(2008) 1SCC 258: (2008) 1 SC (Cri) 200: (2007) 12 Scale 96] this Court following M.S. Narayana Menon [(1999) 3 SCC 35] opined: (K.Prakshan case CC NO.617/2017 PS ANAND VIHAR PAGE 4/10 PRADEEP KAUSHIK vs. VIRENDER GOEL ETC.
[ (2006) 6 SCC 39; (2006) 3 SCC (Cri) 30] - SCC p. 263, paras 13
14)' "13[12]. The Act raises two presumptions : firstly, in regard to the passing of consideration as contained in Section 118(a) therein and, secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability. Presumptions both under Sections 118(a) and 139 are rebuttable in nature. Having regard to the definition of terms 'proved' and 'disproved' as contained in Section 3 of the Evidence Act as also the nature of the said burden upon the prosecution visa vis an accused it is not necessary that the accused must step into the witness box to discharge the burden of proof in terms of the aforementioned provision.
14[13]. It is furthermore not in doubt or dispute that whereas the standard of proof so far as the prosecution is concerned is proof of guilt beyond all reasonable doubt; the one on the accused is only mere preponderance of probability."
9. In the present case in hand, it has to be seen as to whether the accused persons have successfully discharged the onus of proof placed upon them for rebutting the presumptions regarding the cheque being not issued for legally enforceable debt. The relationship between the parties initiated with the execution of MOU Ex.CW1/A which is not disputed by either of them. As per the complainant he invested Rs.75Lakh in terms of said understanding. On the contrary, the accused took the defence that CC NO.617/2017 PS ANAND VIHAR PAGE 5/10 PRADEEP KAUSHIK vs. VIRENDER GOEL ETC.
said MOU was never acted upon and the complainant invested only to the tune of Rs.41Lakh. The Clause I of the MOU records the factum of investment on the date of execution of it. It was of Rs.15Lakhs through cheque no.000661 dated 07.07.2007. It is also apparent that the parties agreed to the investment to the tune of Rs.75Lakhs but on the date of execution of MOU only Rs.15Lakh was invested. The remaining amount was to be invested in future by complainant. CW1 in his cross examination failed to depose as to the mode of remaining investment or the date of month or year when the remaining amount was paid. CW1 was evasive in the entire cross examination and failed to even disclose the source of his income. He failed to disclose his monthly income and even did not depose the approximate amount which he was earning at the time of transaction in question. He further claimed that he had reflected the said amount paid through cheques in the relevant income tax return (ITR). But failed to produce said ITR despite a question mark being put over on his source of income in the cross examination.
10. In his cross examination, CW1 further claimed that he paid almost Rs.35Lakhs through cheque and remaining amount in cash. But he failed to disclose the day, month and year of handing over of cheque of Rs.35Lakhs. He further failed to disclose the details with respect to the loan amount disbursed in cash and its details. He further in his cross examination stated that he did not secure any receipt regarding cash payments made by him at any point of time. The said conduct of the complainant is quite unnatural and raises doubt on the entire case of the CC NO.617/2017 PS ANAND VIHAR PAGE 6/10 PRADEEP KAUSHIK vs. VIRENDER GOEL ETC.
complainant. The MOU Ex.CW1/A is the initial document executed by the parties which records all the minute details regarding the investment proposed to be done by the complainant. It even regards first installment of the investment to the tune of Rs.15Lakh paid through cheque. It is thus hard to believe that such a person who in the year 2007 recorded the payment of first installment of the investment in the MOU would not prepare any document for the subsequent installments. The subsequent amount invested for business of accused was not small amount for which no need was felt by complainant to get it recorded. The said conduct of the complainant shows his entire story of advancement of Rs.75Lakhs without having any receipt to be doubtful.
11. The claim of the accused right from the beginning of the trial is that the said memorandum of understanding was never acted upon by the parties. It remained merely on paper. The said defence is also probabalized by the cross examination of CW1. As per clause eight of MOU Ex.CW1/A, the complainant was supposed to get 50% of the profit earned by the accused firm till the operation of the said agreement. The said clause was never acted upon by the parties as CW1 in his cross examination specifically deposed that he has been never given any profit by the accused firm M/s Vimal Electrical Industries. The clause five of Ex.CW1/A also placed obligation upon the complainant to procure important and bulk orders. He was also supposed to tap official clients in the market for the proper growth of the business in terms of said MOU. But CW1 in his cross examination categorically deposed that he did not CC NO.617/2017 PS ANAND VIHAR PAGE 7/10 PRADEEP KAUSHIK vs. VIRENDER GOEL ETC.
get any client for the accused business nor any bulk order was placed through him. Though, he claimed that he used to give help to the accused for executing the orders taken by them. The part of the testimony regarding help being given by him is contrary to the MOU Ex.CW1/A, as the said role was never to be done by him. Thus, it is quite apparent from cross examination of CW1, that the MOU Ex.CW1/A was never acted upon by any of the parties and it remained a dead letter.
12. The case of the complainant is also based upon the premise that he in terms of MOU Ex.CW1/A advanced Rs.75Lakh as investment in the firm and in lieu of discharge of the said investment/liability, the accused issued the dishonoured cheques. Admittedly, the said cheques have been issued in the year 2011 and the MOU was executed on 13.07.2007. Therefore, it is hard to believe that a person who has done the investment to the tune of Rs.75Lakh in the year 2007 would agree to receive same amount refunded after five years. The said fact has to be seen in the back drop of the relationship of the parties and the purpose for which the investment was done. The investment in question was for commercial purpose and was not a friendly loan. Therefore, it is hard to believe that an investor would agree to refund his huge amount to the tune of Rs.75Lakh in commercial enterprise without any profit or commission after five years of the investment. Therefore, the version of the complainant that the dishonoured cheques were issued towards the refund of the investment appears to be doubtful and the defence of the accused on the scale of preponderance of probabilities appears to be probable.
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13. The second limb of the defence of the accused was that in lieu of the investment as agreed in MOU, the complainant only paid Rs.41Lakh to him. The accused had already supplied goods to the tune of Rs.29,53,749/ and the accused is ready to return the remaining investment amount but the complainant misused the security cheques. The accused to prove the said defence, cross examined the complainant on the said aspect and confronted him with the invoices Ex.CW1/D1 & Ex.CW1/D2 of M/s Star Wire Industries. The response given by the complainant to the said supply of materials was evasive and he tried to hide the correct facts. The CW1 in his cross examination claimed that proprietor of the said firm M/s Star Wire Industries is his wife but he is running the said business of manufacturing alluminium wires. He first admitted about the said invoices in the name of M/s Star Wire Industries but tried to evade from the said piece of evidence by again deposing that he cannot confirm whether said invoices were issued to Star Wire Industries. He also tried to hide the address of the said firm by giving contrary answers. The moment the said invoices were put to the complainant, the onus was upon him to explain about the said invoices and whether the same were issued for any consideration or not. The invoices Ex.CW1/D1 & Ex.CW1/D2 clearly reflect the supply of goods at the instance of accused firm to the firm run by the complainant. There is no reason to disbelieve the authenticity of the said invoices. The complainant failed to explain the said business transaction between the accused and the firm being run by him though in his wife's name which again raises doubt as to the story of the complainant. The said defence of CC NO.617/2017 PS ANAND VIHAR PAGE 9/10 PRADEEP KAUSHIK vs. VIRENDER GOEL ETC.
the accused also rebuts the presumption regarding issuance of cheque in discharge of debt or liability on the scale of preponderance of probabilities.
14. In view of the aforesaid reasons, the court is of the view that accused has been successfully able to rebut the presumptions on the scale of preponderance of probabilities and the benefit of doubt is to be given to the accused. Hence, accused are acquitted of offence U/S 138 Negotiable Instruments Act.
Announced in Open Court (GAGANDEEP SINGH)
on 28.02.2017 Additional Chief Metropolitan Magistrate
Shahdara Distt., KKD Courts, Delhi
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