Delhi District Court
Vishal Kumar vs . G.T.Computer Hardware Engineering ... on 26 February, 2013
Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act IN THE COURT OF SH. SAURABH PARTAP SINGH LALER METROPOLITAN MAGISTRATE06 (East), KARKARDOOMA COURTS, DELHI. CC No. :719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 PS :Preet Vihar Offence complained of : 138 N.I. Act Unique Case ID No. : 02402R0280392010 of CC No. 719/1/10 (Main Case). Sh. Vishal Kumar S/o Rajan Kumar R/o G83, Preet Vihar, Delhi92. .............. Complainant Vs. M/s G.T. Computer Hardware Engineering College Pvt. Ltd. & Ors. Through its Director Sh. Sidharth Gupta S/o Sh. S.K. Gupta R/o B15/5, Shiv Marg, Bani Park, Jaipur. ............. Accused Plea of accused : Pleaded not guilty Date on which reserved for order: 21.01.2013 Date of pronouncement : 12.02.2013 Final Order : Convicted BRIEF STATEMENT OF THE REASONS FOR THE DECISION 1. The Complainant's case in brief is that the complainant had leased out the second floor of plot no.83, Block G, Preet Vihar, Vikas Marg, Delhi to the accused vide registered lease deed dated 7.4.2008 at monthly rent of Rs.1,75,000/ and that as per the said lease deed the lease was for a period of 9 years, of which the lease could not be terminated by either party in the first three CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 1 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act years. That at the time of entering into lease deed the accused had also handed over 36 cheques to the complainant which were post dated for the payment of the rent of the lockin period. All the cheques were of Rs. 1,75,000/ each and the nine cheques which are the subject matter of this case are either the cheques given at the time of the execution of the said lease deed or the cheques given in lieu of the said cheques subsequently. All the said cheques on presentation got dishonoured due to reason 'payment stopped by drawer' on different dates. Thereafter, Legal Notices were sent by complainant with respect to dishonoured cheques through his counsel by Regd. Post and UPC. However, despite that the accused failed to make any payment within the statutory period, hence, this complaint. 2. Complainant led presummoning evidence in all the complaint cases and thereafter, accused was summoned u/s 138 N.I. Act in all the complaint cases. The complaint cases as mentioned above were clubbed together vide order dated 27.04.2011 as the cheques pertain to the same lease deed and the liability behind the cheques arise out of the same transaction. 3. Upon appearance of the accused, copies were supplied to the accused persons free of cost. Notice was framed against the accused u/s 138 N.I. Act on 27.4.2011 and in reply to notice the accused admitted that the cheques pertain to his account and that the same were handed over by him to the complainant at the time of execution of lease deed. The defence that he took was that he was forced to leave the tenanted premises and that his security amount of Rs.10,50,000/ had not been adjusted and that his goods worth Rs.15,00,000/ were also taken into possession by the complainant. Thus, he alleged that he had no liability to honor the cheques in question which were CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 2 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act issued for payment of monthly rent of the tenanted premises. 4. An application was moved u/s 145(2) N.I. Act as per judgment of Hon'ble Delhi High Court titled Rajesh Aggarwal Vs. State on 20.07.2012 and the said application was dismissed on 12.12.2011 vide a speaking order. The accused lead DE, and in DE he himself appeared in the witness box as DW1 and also examined two other witnesses. After that the matter was listed for final arguments and final arguments were heard at length from the Ld. Counsels for both the parties on 22.12.12 and 21.01.13. The matter was listed for order on 31.1.2013, but on that day Presiding Officer was in Plea Bargaining Court and on 8.2.2013 he was on leave for the second half. Thus matter was listed for today for orders. 5. The questions before the court for the disposal of the complaint are: (i) Whether the cheque in question was given by the accused to the complainant in discharge of legally enforceable debt?Disputed as the accused in his reply to notice u/s 251 Cr.P.C took the defence that he was forced to leave the tenanted premises by the complainant and that his security amount of Rs.10,50,000/ had not been adjusted and that his goods worth Rs.15,00,000/ were also taken into possession by the complainant. Thus, he alleged that he had no liability to honor the cheques in question which were issued for payment of monthly rent of the tenanted premises. (ii)Whether the cheque in question was dishonored on presentation? Undisputed, as the accused never disputed the fact that the cheque was dishonored and this fact also stands proved from CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 3 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act the return memos in all the seven cases. (iii)Whether the reason for dishonor of cheque was 'Payment stopped by drawer'?Undisputed, as the accused never disputed that the cheque was dishonored because of 'Payment stopped by drawer' and this fact also stands proved from the return memos in all the seven cases. (iv)Whether the cheque was presented within the period of 6 months from the date when it was issued?Undisputed, as the accused never disputed that the cheque was presented in time and this fact also stands proved from date on the cheques and corresponding return memos in all the seven cases. (v)Whether the complainant made a demand for the payment of amount of money under the cheque by giving a notice in writing to the accused within 15 days of receiving information as regards dishonor of cheque from the bank?Disputed, as the accused in reply to notice u/s 251 Cr.P.C denied having received Legal Notice. (vi)Whether the accused failed to make payment of cheque amount within 15 days of receipt of said notice?Undisputed, as the accused never took the defense that the payment was made by him, rather, he took the defence that he was forced to leave the tenanted premises by the complainant and that his security amount of Rs.10,50,000/ had not been adjusted and that his goods worth Rs.15,00,000/ were also taken into possession by the complainant. Thus, he alleged that he had no liability to CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 4 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act honor the cheques in question which were issued for payment of monthly rent of the tenanted premises. 6. On the basis of the evidence on record, complainant sought conviction on the ground that the cheques in question were given by accused for the payment of the monthly rent of the tenanted premises which he had taken from the complainant vide a registered lease deed dated 07.04.2008. 7. On the other hand, Ld. Defence Counsel sought acquittal on the ground that accused is innocent and he was made to vacate the tenanted premises, hence, he did not honour the cheques in question which were w.r.t. the rent of the tenanted premises. 8. EVIDENCE PRODUCED BY THE COMPLAINANT IN SUPPORT OF THE ALLEGATIONS: In order to prove the allegations, CW1 Vishal Kumar appeared in the witness box as CW1 and filed his affidavit, in all the seven cases, by way of evidence in which he reiterated the allegations made by him in the complaint. The documents produced by the complainant and exhibited are: (a) Seven Complaints. (b) Nine Dishonoured cheques and their corresponding return memos. (c) Legal Notices w.r.t. all the dishonoured cheques. (d) Receipts of Registered Post. (e) AD cards. (f) Registered lease deed dated 7.4.2008. 9. PRESUMPTION : The complainant produced the original cheques, return memos, legal notices and postal receipts/ ADs. He also appeared as witness to support his CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 5 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act allegations with his testimony by way of affidavit in all the complaints. Thus, the complainant produced sufficient material on record for raising the mandatory presumption, which is required to be raised in terms of section 118 (b) and section 139 of the Act, in favour of the holder of the cheque (the complainant), that the same has been issued for discharge of any debt or liability. At this stage the court would like to refer to judgments of Apex Court, i.e., NEPC Micon Ltd. Vs. Magma Leasing Ltd. 1999 4 SCC 253, MMTC Ltd. Vs. Medchi Chemical and Pharma Pvt. Ltd. AIR 2002 SC 182 AND Rangappa Vs. Mohan AIR 2010 SC 1898. In the said judgments after detailed discussion, the Apex Court observed that in cases where the cheques are dishonored by reason of stop payment instruction/ account closed an offence under section 138 could still be made out. It has been held that the presumption under section 139 is attracted in such a case also. That even when the cheque is dishonored by reason of account closed by virtue of Section 139 the Court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. An argument was raised as regards the extent of presumption which can be raised in favour of the complainant and against the accused. While the complainant submitted that the presumption is as regards legally enforceable debt, the accused submitted that the presumption is as regards existence of debt only and not as regards legally enforceable debt. However this issue now stands settled in the light of the judgment titled Rangappa Vs. Mohan AIR 2010 SC 1898 where a three Judges bench of the Apex Court overruled the judgment titled Krishna Janardhan Bhat Vs. Dattatraya G. Hegde AIR CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 6 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act 2008 SC 1325 and observed in para 14 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. ...............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." (emphasis supplied) The judgment titled Hiten P. Dalal Vs. Bratindranath Banerjee, AIR 2001 Supreme Court 3897(1) discusses the scope and ambit of the presumption raised under section 139 N.I. Act in the following words : "The effect of these presumptions is to place the evidential burden on the accused of proving that the cheque was not received by the complainant towards the dishcarge of any liability. Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduced an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. Such a presumption is a presumption of low, as distinguished from a presumption of fact which describes provisions by which the Court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non existence of the presumed fact." It is further held that : "The distinction between the two kinds of presumption lay not only in the mandate to the Court, but also in the nature of the evidence required to rebut the two. In the case of discretionary presumption the presumption if drawn may be rebutted by an explanation which 'might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "the burden resting on the accused person in such a case would not CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 7 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by proof and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exist. Unless therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted." Thus, in the present case also a presumption arises in favour of the complainant and against the accused that the cheques in question were issued in discharge of a legally enforceable debt or liability. 10. DEFENCE OF THE ACCUSED : The accused has admitted that the cheques belong to him and that the same were issued by him for the payment of the monthly rent of the tenanted premises as per the registered lease deed, but he took the defence that he was forced to leave the tenanted premises by the complainant and that his security amount of Rs.10,50,000/ had not been adjusted and that his goods worth Rs.15,00,000/ were also taken into possession by the complainant. Thus, he alleged that he had no liability to honor the cheques in question which were issued for payment of monthly rent of the tenanted premises. He also stated that he had handed over the possession of the tenanted premises to the complainant on 30.10.2010 after a meeting with the complainant at Maharaja Banquet Hall on 30.08.2010 and that it was also agreed in the said meeting that the security amount would be adjusted towards rent till August 2010. The cheques in question were admittedly issued for payment of rent of the tenanted premises as per the registered lease deed dated 7.4.2008 and as per CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 8 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act the complaints the said cheques are issued towards payment of rent for the following months: 1. August 2010 : Cheque no. 554927 2. January 2010 : Cheque no. 554920 (New Ch. No. 798873) 3. December 2009 : Cheque no. 554919 (New Ch. No. 798872) 4. March 2010 : Cheque no. 554922 (New Ch. No. 798874) 5. December 2010 : Cheque no. 554931 6. January 2011 : Cheque no. 554932 7. November 2010 : Cheque no. 554930 8. September 2010 : Cheque no. 554928 9. October 2010 : Cheque no. 554929 All the aforesaid cheques got dishonoured and hence the present seven cases were filed by the complainant against the accused company and its director Sh. Sidharth Gupta. The registered lease deed dated 7.4.2008 is the magna carta of the dispute between the parties and the liabilities and rights of the parties arise out of this lease deed. The cheques were given in view of the liability arising out of this lease deed and this lease deed has been admitted by the accused and is duly registered before the SubRegistrar Delhi. The relevant terms and conditions of the lease deed have been reproduced below for the discussion that would follow: "Now in consideration of the mutual covenants and conditions therein, it is agreed as follows: 1. That the lessor is full seized and possessed of and is the owner nd of the 2 Floor on the premises 83, Block G, Preet Vihar, Vikas Marg, New Delhi having an area of 3,000 sq. ft. (Approx.) more or less, super builtup area having staircase from the front side and is fully competent to let out the said premises. 2. The lessor hereby allows and permits the lessee on the terms CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 9 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act and conditions contained herein to use the aforesaid premises for a period of nine years commencing from 07.04.2007 upto 06.04.2016. However, at the expiry of three years, the rent will be increased by 20 % and after expiry of six years a further increase of 20 % shall be made. 3. That the lessee will not sublet, assign of part with possession of any part or whole of the demised premises. 4. This lease shall have a lockin period of three years. During this three yeas the lease will not be liable to be terminated either by the lessor or by the lessee. 5. That the lessee cannot vacate the demised premises for three years or in case wants to vacate in that event the lessee shall be forthwith liable to pay the rent for the remaining period to the lessor. 6. However, after the expiry of the initial lockin period of three years, the lessee or the lessor can terminate the lease agreement by giving three months notice in writing to the other party. 7. (i) The lessee shall be liable to pay monthly payment of Rs.1,75,000/ (Rupees one lakh seventy five thousand only) per month by cheque or Pay Order and not by cash, every month th by the 7 of each calender month in advance. (ii) The lessee has deposited with the lessor a sum of Rs.10,50,000/ (Rupees ten lakh fifty thousand only) to the lessor as interest free security deposit equivalent to six months lease rent at the time of execution and commencement of this lease agreement. Rs.10,50,000/ vide cheque No. 126660 dated 07.04.08 Standard Chartered Bank MI Road (Jaipur). (iii) This payment for the initial period of three years of lease has been agreed to be paid by 36 monthly cheques th dated 7 of each month by postdated cheques and which cheques will be duly honoured. The lessee has assured that if any cheque is dishonoured, the lessee and its entire Board of Directors will be responsible for the dishonour of the cheque and consequences. (iv) That the possession of the premises is being handed over at the time of this agreement. However, at the request of the lessee he is being given one month time for interiors of the th premises. That the rent will be effective and paid before the 7 day of May, 2008. rd (v) That the lessee also wishes to take on rent the 3 floor of the building. However, it wishes to do the same within 12 months of this present agreement. CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 10 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act (vi) That the lessee and its Board of Directors who are running the business will be responsible for payment of the money and other consequences, if any. (vii) That the lessee has assured the lessor that all cheques towards the payment of rent paid in advance will be duly honoured on presentation and the lessee will not raise any dispute in regard to the payments in regard to rent on any ground whatsoever. (viii) It is further understood and agreed by the lessee that if two cheques of the lessee towards the payment of rent as aforesaid are dishonoured then the lease will stand automatically terminated and lessee or any other person through him will have no right to enter the premises and the possession of the premises shall be deemed to have been handed over to the lessor. (ix) That in such case the lessor shall also be entitled to all the assets and fixtures installed by the lessee. (x) That on the expiry or sooner determination of the deed, the lessor shall refund to the lessee the interest free security deposit of 6 months after the deduction of the dues if any payable by the lessee to the lessor. 8. That the lessee is aware of the electricity shortage problem in Delhi and will be permitted at its own cost to install a noise and pollution free generator subject to the convenience of the neighbours and other occupants of the building and the lessor will not be responsible for the same. The lessee shall himself directly deal with the neighbours and other persons and authorities. However, the lessor will provide s uitable place for the installation of the generator not exceeding 25 KVA." (emphasis supplied) single underline = relied upon by accused double underline = relied upon by complainant As per the lease deed the said deed is for a period of 9 (nine) years out of which there is a lockin period of first three years during which the lease deed cannot be terminated either by the complainant or the accused. For the payment of rent of the first three years, 36 post dated cheques, for each month, were issued by the accused in favour of the complainant and the cheques in question are those 36 CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 11 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act post dated cheques, except cheque no 798873, 798872 and 798874 which were issued in lieu of cheque no. 554920, 554919 and 554922. 1.FIRST ARGUMENT/DEFENCE: The first argument/defence of the accused is that the terms of the registered lease deed were modified by subsequent oral agreement between the parties which were agreed to at the meeting held on 30.8.2010 at Maharaj Banquet Hall and that as per the said agreement it was agreed that the complainant would adjust the security amount of Rs.10,50,000/ towards rent till Augudt 2010 and the future rent was agreed to be adjusted against the set up worth Rs.15,00,000/. (a) The said meeting or any subsequent agreement has been denied by the complainant and it has been admitted by the accused that there was no subsequent written agreement between the parties after the registered lease deed dated 7.4.2008. The accused stated in his cross examaination: "It is correct that a lease agreement Ex.CW1/1 took place between me and complainant. Except CW1/1 there is no written agreement between me and complainant" (b) The question before the court is: Whether the terms of a registered lease deed can be modified by subsequent oral agreement and whether the oral evidence produced can be considered regarding modification of such terms in the light of the provisions contained in Indian Evidence Act? i. The answer to the question lies in sections 91 and 92 of Indian Evidence Act. As per section 91 of Indian Evidence Act when the terms of a contract or of any disposition of property have been reduced to the form of a document, no evidence shall be given in proof of the terms of such contract CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 12 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act or disposition except the document itself. ii. In the present case the complainant has produced the registered lease deed and as stated above the accused has admitted the execution of lease deed. Thus the document itself has been produced to prove the terms of the lease deed. iii.The accused states that the terms and conditions of the lease deed got altered by subsequent oral agreement, but complainant denied the same and it has been argued by the complainant that the terms of a registered lease deed cannot be altered by an oral agreement and that the accused cannot lead oral evidence to show that the terms of the registered lease deed were altered by a subsequent oral agreement. iv.As per section 92 of Indian Evidence Act once the contract or disposition of property has been proved as per section 91 of Indian Evidence Act, no evidence of any oral agreement or statement shall be admitted as between the parties for the purpose of contradicting, varying, adding to, or subtracting from, its terms. Proviso no.4 to the said section allows to prove the existence of any distinct subsequent oral agreement to rescind or modify any such contract or disposition of property, but the proviso is not applicable where such contract or disposition of property is by law required to be in writing or has been registered. v. In the present case the Lease Deed has been registered as it is required by the law to be registered. Thus, Proviso 4 to section 91 of Indian Evidence Act shall not apply to the present registered lease deed and the evidence produced by the accused to show that by a subsequent distinct oral agreement dated 30.08.2010 the terms of the said lease deed were CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 13 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act modified, cannot be considered in view of the specific bar contained in section 91 of Indian Evidence Act. Thus this argument of the accused does not have force and it does not absolve the accused of his liability to honour the cheques in question. 2.SECOND ARGUMENT/DEFENCE: The second defence of the accused has been that as per the lease deed the complainant was to provide space to him to install a generator but the said space was never provided, due to which the complainant suffered losses and as there was breach of the lease deed by the complainant by not providing the space of generator hence the accused is also not liable to honour the cheques in question. The complainant on the other hand argued that the space for generator was provided and the generator was also installed by the accused and that he is raising a false defence to avoid liability. (a)The question before the court is whether the accused was permitted by the lease deed to stop the payment of rent in case he was not provided with the space for generator? i. The court has gone through the lease deed and found that in clause 8 it is stated that "lessor will provide suitable place for the installation of the generator not exceeding 25 KVA". However, there is no clause in the lease deed, that in case the complainant fails to provide space for generator then the accused would be permitted to not to pay rent till such place for installation is provided by the complainant. ii. The only course that was available to the accused if he was not being provided with space for generator, was to approach the concerned court or authority and seek order against the complainant directing him to provide CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 14 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act such space or to approach arbitrator for redressal of his grievances as per clause 32 of the Registered Lease Deed. iii. But, the accused opted to stop the payment of the cheques in question and thereby landed himself in the present situation. iv. Thus, the argument of the accused that the rent was not paid and the cheques were not honoured as the space for generator was not provided by the complainant, does not absolve the accused of his liability to honour the cheques in question which were for the rent of the tenanted premises of which the accused had taken possession as per the lease deed. 3.THIRD ARGUMENT/DEFENCE: The third argument of the accused has been that he had regularly written to the complainant through emails about the problems being faced by him and no reply to the same was given and the complainant thus by remaining silent admitted what the accused stated in his e mails to the complainant. (a)The court has gone through the record and found that the accused in his testimony as DW1 has placed on record several emails which were written by him to the complainant. i. Ex.DW1/C : As per email dated 26.9.2009 the accused states that as the market conditions are not favourable, hence the accused is not able to pay rent and he gave notice for vacation of the tenanted premises. »»»»»» As per this email the only reason for the vacation of the premises is that the market conditions are not favorable to the accused and the accused is not able to pay the rent. ii. Ex.DW1/E : As per email dated 10.2.2010 the accused asks the complainant to adjust one month rent with the security deposit and he CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 15 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act mentions about another PDC for the rent for the month of February 2010. »»»»»» There is nothing mentioned in this email about installation of generator or other problems being faced by the accused due to any fault on the part of the complainant. iii.Ex.DW1/E : As per email dated 3.6.2010 the accused states that the rent that the accused is paying is not justified as per the current market scenario and that equal space is available at the rent of Rs.1,20,000/ per month. He further stated that he was bearing loss every month and for this reason he asked the complainant to not to present the rent cheques. »»»»»» As per this email the only reason for the vacation of the premises is that the market conditions are not favorable to the accused and the accused is not able to pay the rent. There is nothing mentioned in this email about installation of generator or other problems being faced by the accused due to any fault on the part of the complainant. iv. Ex.DW1/F :As per email dated 8.5.2010 the accused asks the complainant to adjust one month rent with the security deposit and he mentions about another PDC for the rent for the month of August 2010. »»»»»» There is nothing mentioned in this email about installation of generator or other problems being faced by the accused due to any fault on the part of the complainant. v. Ex.DW1/G & H :The email dated 23.9.2010 mentions about the meeting dated 30.08.2010 and about some terms that might have been settled in the said meeting. However, sending of the said email to the complainant does not amount to admission of the complainant to the terms stated in the email and as stated earlier subsequent oral agreement cannot be proved CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 16 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act by the accused to alter the terms of the registered lease deed as per section 92 of Indian Evidence Act. »»»»»» There is nothing mentioned in this email about installation of generator or other problems being faced by the accused due to any fault on the part of the complainant. Thus, all these emails show that the main reason behind non payment of rent was not that the complainant had not provided for space for the installation of the generator or that there was some fault on the part of the complainant, rather, the main reason was that the rent as per the accused was high and the market conditions were not favorable because of which the accused was suffering losses in his business. Thus, this argument of the accused is baseless and the contents of the emails support the story of the complainant and not that of the accused. 4. FOURTH ARGUMENT/DEFENCE: The fourth argument of the accused has been that as per the lease deed the deed stands automatically terminated as per clause 7(ix) i.e. "It is further understood and agreed by the lessee that if two cheques of the lessee towards the payment of rent as aforesaid are dishonoured then the lease will stand automatically terminated and lessee or any other person through him will have no right to enter the premises and the possession of the premises shall be deemed to have been handed over to the lessor." The argument of the accused has been that on the dishonour of the two cheques as per clause 7(ix) of the lease deed, the lease deed stood automatically terminated and that as the lease deed itself stood terminated, hence, the accused was not liable to honor the remaining cheques. The said argument has been countered by the complainant by stating that the lease deed could not be terminated during the lockin period and that the clause CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 17 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act of automatic termination of the lease deed was with respect to the remaining period of the nine year lease. It was also argued that even under such circumstances the accused was liable to pay the rent for the lockin period of three years as per clause 5 of the lease deed which reads as under: "That the lessee cannot vacate the demised premises for three years or in case wants to vacate in that event the lessee shall be forthwith liable to pay the rent for the remaining period to the lessor." The Lease Deed and its terms can neither be modified by the accused nor can they be modified by the complainant. (a) The question before the court is: Whether the lease deed stood terminated automatically upon the dishonour of the first two cheques and that whether the accused was liable to honour the remaining cheques for rent, once the lease deed stood automatically terminated as per clause 7 (ix) of the lease deed? i. The answer to this question lies in the Lease Deed itself. The terms of the lease deed have already been reproduced earlier, however some of them are again being reproduced as they are relevant to decide the issue at hand: "4. This lease shall have a lockin period of three years. During this three yeas the lease will not be liable to be terminated either by the lessor or by the lessee. 5. That the lessee cannot vacate the demised premises for three years or in case wants to vacate in that event the lessee shall be forthwith liable to pay the rent for the remaining period to the lessor. 6. However, after the expiry of the initial lockin period of three years, the lessee or the lessor can terminate the lease agreement by giving three months notice in writing to the other party. 7. (i) The lessee shall be liable to pay monthly payment of CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 18 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act Rs.1,75,000/ (Rupees one lakh seventy five thousand only) per month by cheque or Pay Order and not by cash, every month th by the 7 of each calender month in advance. (ii) The lessee has deposited with the lessor a sum of Rs.10,50,000/ (Rupees ten lakh fifty thousand only) to the lessor as interest free security deposit equivalent to six months lease rent at the time of execution and commencement of this lease agreement. Rs.10,50,000/ vide cheque No. 126660 dated 07.04.08 Standard Chartered Bank MI Road (Jaipur). (iii) This payment for the initial period of three years of lease th has been agreed to be paid by 36 monthly cheques dated 7 of each month by postdated cheques and which cheques will be duly honoured. The lessee has assured that if any cheque is dishonoured, the lessee and its entire Board of Directors will be responsible for the dishonour of the cheque and consequences. (iv) That the possession of the premises is being handed over at the time of this agreement. However, at the request of the lessee he is being given one month time for interiors of the th premises. That the rent will be effective and paid before the 7 day of May, 2008. ...........
(vii) That the lessee has assured the lessor that all cheques towards the payment of rent paid in advance will be duly honoured on presentation and the lessee will not raise any dispute in regard to the payments in regard to rent on any ground whatsoever.
(viii) It is further understood and agreed by the lessee that if two cheques of the lessee towards the payment of rent as aforesaid are dishonoured then the lease will stand automatically terminated and lessee or any other person through him will have no right to enter the premises and the possession of the premises shall be deemed to have been handed over to the lessor.
(ix) That in such case the lessor shall also be entitled to all the assets and fixtures installed by the lessee.
(x) That on the expiry or sooner determination of the deed, the lessor shall refund to the lessee the interest free security deposit of 6 months after the deduction of the dues if any payable by the lessee to the lessor."
A. From the lease deed it is clear that the cheques have been issued for payment of the rent for the lockin period only [clause 7(iii)] and as such CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 19 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act the clause [clause 7(ix)] relating to dishonor of cheques corresponds to the first three years of the lease and not thereafter, as there is no situation in which the cheques would get dishonored after the expiry of the lockin period as no cheques have been issued for period after the first three years of lease.
B. As per the lease deed none of the parties can terminate the lease within the lockin period of three years and if during the said period the accused vacates the tenanted premises then he is required to pay the rent for the remaining period of the lease deed as per clause 5 of the lease deed. The said situation arises only if the accused vacates the premises under clause 5 of the lease deed.
C. However, the situation would be entirely different if the accused is made to vacate the premises under clause 7(ix) of the lease deed as in that case clause 5 would not apply because:
• as regards the situation arising out of clause 7(ix) regarding automatic termination, there are subsequent clauses which state that in such event the complainant would be entitled to all the assets and fixtures installed by the accused.
• If, the automatic termination under clause 7(ix) is clubbed with clause 5 then it would result in following:
• The possession would come to the complainant as per clause 7(ix).
• The complainant would still get rent for the remaining period of the lockin period of the lease.
CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 20 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act • The complainant would also keep the security deposit of Rs.10,50,000/.
• The complainant would also be entitled to all the assets and fixtures installed by the accused in the tenanted premises.
Such a situation is not envisaged by the lease deed, if all the provisions of the lease deed are read harmoniously. • As per the lease deed if the accused vacates the premises under clause 5 of the lease deed then:
• The accused would be liable to pay the rent for the remaining lock in period.
• The complainant would be liable to return the security deposit of Rs.10,50,000/ upon expiry of the lockin period.
• The accused would be entitled to remove his fixtures and assets and the complainant would have no right upon the same.
• As per the lease deed if the lease deed gets automatically terminated under clause 7(ix) of the lease deed then:
• The complainant would be entitled to retain the security deposit of Rs.10,50,000/. ( as the said amount is to be refunded as per clause 7(xi) only on expiry or earlier determination of lease deed and not upon its automatic termination) • The complainant would also be entitled to the CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 21 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act assets and fixtures installed in the tenanted premises by the accused.
• The complainant would be entitled to possession of the premises.
• Thus, clauses 5 and 7(ix) cannot be read together, as they are not meant to be read together as per the terms of the lease deed. • The court would give two examples to make the point more clear:
th th • Example 1: If the cheques for the 10 and 11 months rent got dishonored [as per clause 7(ix)], then, • The complainant would be entitled to keep the security deposit of Rs.10,50,000/ and also the assets and fixtures installed in the premises (of whatever amount) and to possession of the property. He would not be entitled to rent for the remaining period.
• The complainant would not be entitled to (1) the possession of the property and (2) fixtures and assets installed and (3) also to remaining 25 months rent, the cheques of which are already with the complainant.
(i.e. all the three) • Example 2: If the accused vacated the premises in 11th month of tenancy [as per clause 5], then, • The complainant would not be entitled to keep the security deposit of Rs.10,50,000/ and he would not be entitled to retain the assets and fixtures installed in the CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 22 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act premises (of whatever amount).
• He would be entitled to the possession of the property and to rent for the remaining lockin period and liable to return the security amount after 36 months i.e. upon expiry of the lock in period.
• The complainant would not be entitled to (1) the possession of the property and (2) fixtures and assets installed and (3) to retain the security amount and (4) also to remaining 25 months rent, the cheques of which are already with the complainant.
(i.e. all the four) D. Thus, as per the lease deed in case the lease stands automatically terminated under clause 7(ix) then the complainant is entitled to keep the security deposit (of Rs.10,50,000/) and also entitled to the assets and fixtures installed in the tenanted premises by the accused, but then he is not entitled to receive/recover rent for the remaining period of the lease. E. In the present case, more than two cheques got dishonored as is clear from the record and it has also not been disputed by the accused that the cheques did not get dishonored. Thus, as per the deed the lease stood automatically terminated upon dishonor of the first two cheques and the possession stood transferred to the complainant and the complainant became entitled to retain the security amount as well as all the fixtures and assets installed in the premises by the accused. But as the lease deed stood terminated automatically and the possession of the premises CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 23 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act stood transferred to the complainant, hence, the accused was not liable to honour the remaining cheques (including the remaining 7 cheques in this case), in view of the detailed discussion above.
(b) Thus, this argument of the accused seems to be supported by the terms of the lease deed and as such the court is of the opinion that the accused is liable for the dishonor of the following two cheques:
1. January 2010 : Cheque no. 554920 (New Ch. No. 798873)
2. December 2009 : Cheque no. 554919 (New Ch. No. 798872)
(c) An argument was raised by the complainant that the accused had not vacated the premises as per clause 7(ix) of the Lease Deed after dishonour of the first two cheques and as such he is liable to pay the rent for the remaining period.
However, in the opinion of the court if a tenant overstays after the termination of a lease deed, then he is required to pay damages/market rent which can be determined by competent court, but the tenant cannot be prosecuted then for the dishonor of the cheques for rent of the remaining period of lease as the lease deed stood terminated.
(e) As regards the remaining cheques in view of the automatic termination clause [clause 7(ix)], the liability behind those cheque upon automatic termination came to an end, and as such for dishonour of the said cheques the accused is not liable for prosecution under 138 N.I.Act.
11. CONCLUSION : In view of the above discussions and cited judgments, it is clear that the accused has not been able to prove the defence taken by him that he was absolved of his liability under the lease deed due to a subsequent distinct oral CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 24 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act agreement between parties. He also failed to rebut the presumption u/s 139 N.I. Act qua two cheques as mentioned above, though as regards the remaining seven cheques, the court came to the conclusion that they were issued, post dated at the time of execution of lease deed, for discharge of legal liability, but the said liability came to an end due to automatic termination of the lease deed under clause 7(ix) of the lease deed, i.e. before the cheques were presented and for this reason their dishonor do not attract offence under section 138 NI Act. Accordingly, all the necessary ingredients to make out the offence u/s 138 N.I. Act stands proved qua the following two cheques:
1. January 2010 : Cheque no. 554920 (New Ch. No. 798873)
2. December 2009 : Cheque no. 554919 (New Ch. No. 798872) and accused G.T. Computer hardware Engineering Pvt Ltd and its director Sh.
Sidharth Gupta are convicted for the offence u/s 138 N.I. Act for dishonour of the aforesaid two cheques.
Be heard separately on point of sentence on 26.02.2013. ANNOUNCED ON 12.02.2013.
(SAURABH PARTAP SINGH LALER) MM06(East)/KKD/12.02.2013 Certified that this judgment contains 30 pages and each page bears my signatures.
(SAURABH PARTAP SINGH LALER) MM06(East)/KKD/12.02.2013 CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 25 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act IN THE COURT OF SH. SAURABH PARTAP SINGH LALER METROPOLITAN MAGISTRATE06 (East), KARKARDOOMA COURTS, DELHI.
CC No. :719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 PS :Preet Vihar Offence complained of : 138 N.I. Act
Unique Case ID No. : 02402R0280392010 of CC No. 719/1/10 (Main Case). Sh. Vishal Kumar S/o Rajan Kumar R/o G83, Preet Vihar, Delhi92.
.............. Complainant Vs.
1. M/s G.T. Computer Hardware Engineering College Pvt. Ltd. & Ors.
2. Sh. Sidharth Gupta S/o Sh. S.K. Gupta R/o B15/5, Shiv Marg, Bani Park, Jaipur, Director of M/s G.T. Computer Hardware Engineering College Pvt. Ltd.
............. Accused
persons
Date of Conviction : 12.02.2013
Date of Sentence : 26.02.2013
ORDER ON SENTENCE
Accused persons were convicted for offence under section 138 of the Negotiable Instruments Act on 12.02.2013.
Arguments on sentence were heard at length on behalf of both the parties.
Punishment prescribed by Law: As per section 138 of the Negotiable Instruments Act, the punishment prescribed is imprisonment for a term which may extend to two years or with fine CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 26 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act which may extend to twice the amount of cheque or both and in cases which are tried summarily, the punishment prescribed is imprisonment for a term which may extend to one year or with fine which may extend to twice the amount of cheque or both.
The cheque amount in the present case is Rs.3,33,760/ hence as per section 138 of the N.I. Act and in view of judgment of Hon'ble Supreme Court titled R.Vijayan Vs. Baby AIR 2012 SC 528 (para 12), this court has the power to impose fine equivalent to twice the cheque amount which in the present is Rs.6,67,520/.
From the said fine, the court can compensate the complainant under section 357 (1) (b) of Cr.P.C for the loss or injury caused to him and can also apply a part of the fine in defraying the expenses incurred in the prosecution by the complainant u/s 357 (1) (a) Cr.P.C.
Arguments : The complainant has submitted that though the cheque was payable in year 2010 and about two years have passed since then, therefore, the complainant be compensated with atleast double the cheque amount and the Ld. Counsel for complainant has also strongly prayed for imprisonment of the accused in the light of the Objects and Reasons of the Amendment Act 55 of 2002 of the Negotiable Instruments Act, 1881.
Ld. Counsel for the accused on the other hand submitted that the offence being an economic offence should be punished by an economic punishment and no purpose would be served by curtailing the liberty of the accused by sending him to imprisonment. He also made some submissions on the merits of the case and the judgment of the court, however, the same have not been discussed being not CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 27 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act relevant to the issue at hand.
Considerations: At this stage of order on sentence, the court is well aware of the fact that protection of society and stamping out criminal proclivity must be the object of law which must be achieved by imposing an appropriate sentence and that it is the duty of this court as that of any other court, to award proper sentence having regard to the nature of offence and the manner in which it was executed or committed etc. The criminal law adheres in general to the principle of proportionality in prescribing liability according to the culpability of each kind of criminal conduct. Proportion between crime and punishment is a goal respected in principle.
Thus, the court at this stage is required to give consideration to the facts and circumstance of this case for deciding the just and appropriate sentence to be awarded for offence under section 138 of N.I. Act, and also considered the aggravating and mitigating facts and circumstances in which a crime has been committed as the same are to be delicately balanced on the basis of relevant circumstances in dispassionate manner by this court. Order on Sentence: As the accused Sidharth Gupta has been convicted for offence under section 138 of N.I. Act in this case on 12.02.2013, hence, the accused Sidharth Gupta is sentenced to undergo simple imprisonment for a period of ten months in this case as the accused has got stopped the payment of the cheques and has thus deliberately committed offence u/s 138 N.I. Act. It is not a case where due to financial constraints the cheque got dishonoured due to insufficient funds. Order as regards compensation/ fine: CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 28 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act It is clear from the record that the cheque in question was payable in the year 2010 i.e., for approximately two years and since then no payment has been made till date, thereby causing loss of use of money as well as interest to the complainant and in the opinion of the court, it would be justified, if the complainant is compensated with the cheque amount and 9% p.a. interest thereon as per the judgment of Hon'ble Supreme Court titled R. Vijayan Vs. Baby AIR 2012 SC 528 (para 18) which comes out to approximately Rs.4,00,000/(Rs.3,33,760/ Principle + Rs.65,000/ interest approx.).
As far as the expenses incurred by the complainant in prosecution of the case is concerned, the court is of the opinion that it would make the end of justice meet, if, expenses are determined at Rs.50,000/.
Thus, keeping in mind the compensation and expenses of prosecution as determined above, the accused are sentenced to pay fine of Rs.4,60,000/ which would be applied as under :
1. Rs.50,000/ as expenses incurred by complainant in prosecution of the case - to be paid to complainant from the fine recovered.
2. Rs.4,00,000/ as compensation for loss or injury suffered by complainant
- to be paid to complainant from the fine recovered.
3. Rs.10,000/ is the fine which will remain with the state. FINAL SENTENCE : As the accused persons have been convicted for offence under section 138 of N.I. Act in this case, therefore :
1. M/s G.T. Computer Hardware Engineering College Pvt. Ltd. is sentenced to pay fine of Rs.10,000/ (ten thousand).
2. Accused Sidharth Gupta is sentenced to undergo simple imprisonment for a period of ten months in this case and he is further sentenced to pay fine of Rs.4,50,000/ (four lakhs fifty thousand only) in default Simple Imprisonment for two months.
CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 29 / 30 Vishal Kumar Vs. G.T.Computer Hardware Engineering Pvt. Ltd. & ors U/s 138 NI Act The fine shall be payable within one month from today. It is, however, made clear that undergoing sentence in default of payment of fine shall not absolve the accused of his liability to pay fine as the same shall in such case be recoverable under section 421 of Cr.P.C.
(S.P.S. LALER) MM06(East)/KKD/26.02.2013 CC No. 719/1/10, 52/1/11, 729/1/10, 718/1/10, 689/1/10, 24/1/11 & 85/1/11 Page No.: 30 / 30