Delhi District Court
Iris Computers Ltd vs . Jayachandrakumar Raveendran Nair ... on 27 June, 2023
IN THE COURT OF MS. ANAM RAIS KHAN,
METROPOLITAN MAGISTRATE -01 (NI ACT),
NEW DELHI DISTRICT, RACC, NEW DELHI
1. Complaint Case : 5344/2020
number DLND020073632020
2. Name & address of the : Iris Computers Ltd.
complainant A-155, Road No.4,
Mahipalpur Extension, New
Delhi-110057
Through its Authorized
Representative
3. Name and address : Jayachandrakumar
of the accused Raveendran Nair Suseela
S/o Raveendran Nair
Proprietor- Zigma Solutions
R/o Flat No. 3C, B Canti
Celestial Homes, Jawahar
Nagar, Kowdiar,
Thiruvananthapuram,
Kerala-695003.
4. Offence complained : Section 138, Negotiable
Instruments Act, 1881.
5. Plea of the guilt : Pleaded not guilty
6. Final Order : Convicted
7. Date of institution : 27.07.2020
8. Date on which : 29.05.2023
reserved for judgment
9. Date of judgment : 27.06.2023
CC No. 5344/20 1/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
BRIEF STATEMENT OF FACTS AND REASONS FOR
THE DECISION
1. Vide this judgement, this court shall dispose of the
aforementioned complaint case filed by the complainant
company, namely Iris Computers Ltd. against the accused,
namely, Jayachandra Kumar in respect of the dishonour of
three cheques, first bearing no. 359077 dated 28.02.2020 for an
amount of Rs.26,57,715/-, second bearing no. 359078 dated
28.02.2020 for an amount of Rs. 50,00,000/- and third bearing
no. 359079 dated 28.02.2020 for an amount of Rs. 50,00,000/- all
drawn on State Bank of India, Thiruvananthapuram (hereinafter
referred to as the "Impugned Cheques").
2. Tersely, it is the case of the complainant company that it is
involved in the business of computers and peripherals and is a
distributor of material manufactured by various manufacturers
which is sold and distributed in the market to resellers like the
accused against the payment of entire value of the material. It is
further their case that the accused, being the sole proprietor of
Zigma Solutions, approached them for the supply of material and
on the basis of the assurances of the accused regarding his
financial soundness, the complainant company serviced the
orders placed upon it by the accused and also allowed credit
facility with interest @ 2% per month on the delayed payment. It
is alleged that the material was supplied to the accused as per his
due satisfaction as to the quantity, quality, specification and
description without any dispute being raised by him. It is alleged
that as on 26.02.2020 against the balance due, delayed payments
and interest accrued on delayed payments, an amount of
CC No. 5344/20 2/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
Rs.1,34,88,267.93/- was due and payable by the accused as per
the ledger maintained by the complainant company in the normal
course of its business.
3. It is further the case of the complainant company that the
impugned cheques were issued by the accused against the
discharge of his abovementioned legally enforceable liability. It
is further alleged that upon presentation, the impugned cheques
were dishonoured for the reasons "refer to drawer/ not arranged
for" and were returned vide a composite cheque return memo
dated 02.03.2020. Thereafter, the complainant company sent a
legal demand notice dated 01.04.2020 to the accused through e-
mail which was duly served upon him. Since the accused failed
to pay the amount of the impugned cheques within the statutory
period of 15 days from the receipt of legal demand notice, hence,
the complainant company has moved this court with the present
complaint under Section 138 of the Negotiable Instruments Act,
1881 (hereinafter referred to as the "NI Act").
4. In pre-summoning evidence, AR of the complainant
company examined himself as CW-1 on affidavit being Ex.
CW1/A and placed reliance on his complaint and certain
documents i.e. copy of board resolution being Mark CW1/1,
ledger account along with certificate under Section 65-B Indian
Evidence Act being Ex. CW1/3, impugned cheques being Ex.
CW1/4 to Ex. CW1/6, cheque return memo dated 02.03.2020
being Ex. CW1/7 to Ex. CW1/9, legal notice dated 01.04.2020
alongwith original postal receipt and tracking report thereof
being Ex. CW1/10 (Colly) and complaint being Ex. CW1/2.
CC No. 5344/20 3/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
5. Upon prima facie consideration of the pre-summoning
evidence, accused was summoned vide order dated 14.12.2020.
6. Upon the appearance of the accused, notice under Section
251, Cr.P.C. was served upon him on 06.12.2021 to which he
pleaded not guilty. At this stage, the accused admitted the receipt
of legal demand notice as well as his signatures and handwriting
on the cheque bearing no.359077 and only his signatures and not
handwriting on the remaining two cheques bearing no. 359078
and 359079. He stated that he was acting as a System Integrator
on behalf of Kerala State Electricity Board (hereinafter referred
to as 'KSEB') to purchase computers and had contacted the
complainant for supply of the same. He further stated that a
tripartite agreement was made between the complainant, himself
and Kerala State Electricity Board and undertook to produce the
same during the trial.
7. After an application under Section 145 (2) of the NI Act
moved on behalf of the accused was allowed, AR of the
complainant was recalled for his examination. AR of the
complainant, who deposed as CW-1 was examined-in-chief,
cross-examined and discharged. Since no other witnesses were
sought to be examined by the complainant company,
complainant's evidence was closed vide separate statement of the
AR of the complainant and Order of this court dated 19.09.2022.
8. Statement of accused under Section 313 Cr.P.C. read with
Section 281 Cr.P.C. was recorded on 14.11.2022. The accused
maintained his plea of defence taken at the stage of framing of
notice under Section 251 Cr.P.C. He also admitted the receipt of
legal demand notice and denied the document Ex. CW1/3. Since
CC No. 5344/20 4/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
the accused chose to lead defence evidence, the matter was
adjourned for filing of application under Section 315 Cr.P.C
along with list of witnesses, if any.
9. After the application under Section 315 Cr.P.C moved on
behalf of the accused was allowed, he deposed as DW-1 as the
only witness in defence. During his examination in chief,
accused relied upon copy of Power of Attorney dated 04.04.2019
being Mark DW1/1 (Colly), copy of communication dated
05.04.2019 being Mark DW1/2, e-mail dated 08.04.2019 being
Mark DW1/3, copy of purchase orders issued by Kerala State
Electricity Board being Mark DW1/4 (Colly), invoices raised
upon KSEB being Mark DW1/5 (Colly), copy of RTI
applications being Ex.DW1/6 (Colly) (OSR). He was duly cross-
examined and discharged. Since no other witnesses were sought
to be examined by the accused, DE was closed vide his separate
statement and order dated 23.03.2023. Accordingly, the matter
was adjourned for advancement of final arguments.
10. Final arguments were addressed on behalf of both the
parties on 08.05.2023. Written submissions were also filed.
11. Rival submissions have been considered and record of the
case as well as judgments relied upon by the parties have been
carefully perused.
12. Defence of the accused as revealed at different stages of
the trial has been broadly two fold: Firstly, legal demand notice
was not sent within the statutory period of thirty days from the
date of dishonour of the impugned cheques,
and secondly, that there is no legally enforceable debt or liability
in favour of the complainant and against the accused as on the
CC No. 5344/20 5/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
date of issuance or presentation of the impugned cheques as they
were issued as security cheques against supply of goods for
which entire payment has been received by the complainant
company from KSEB.
13. Before delving into the facts of the present case, it is
relevant to discuss the law applicable to the present proceedings.
To bring home a liability under Section 138 of the NI Act,
following elements must spring out from the averments in the
complaint and the evidence adduced by the complainant, which
are:
"(a) The accused issued a cheque on an account
maintained by him with a bank.
(b) The said cheque has been issued in discharge, in
whole or in part, of any legal debt or other liability,
which is legally enforceable.
(c) The said cheque has been presented to the bank
within a period of three months from the date of
cheque or within the period of its validity.
(d) The aforesaid cheque, when presented for
encashment, was returned unpaid/dishonoured.
(e) The payee of the cheque issued a legal notice of
demand to the drawer within 30 days from the
receipt of information by him from the bank
regarding the return of the cheque.
(f) The drawer of the cheque failed to make the
payment within 15 days of the receipt of aforesaid
legal notice of demand."
14. Once the other ingredients mentioned in the foregoing
paragraph are established by the complainant, then as soon as the
execution of impugned cheque is admitted by the accused, a
factual base is established to invoke the presumption of cheque
having been issued in discharge, in whole or in part, of any debt
or other liability by virtue of Section 118(a) read with Section
CC No. 5344/20 6/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
139 of NI Act. This is a reverse onus clause, which means that
unless the contrary is proved, it shall be presumed that the
impugned cheque was drawn by the accused for a consideration
and that the complainant had received it in discharge of a debt/
liability from the accused. In the case titled Bir Singh Vs.
Mukesh Kumar, (2019) 4 SCC 197, it was held by Hon'ble
Supreme Court of India that once the accused has admitted the
signatures on the cheque in question, then the court is bound to
raise presumption under Section 139 NI Act.
15. It has been held by Hon'ble Supreme Court of India in the
judgment titled Rangappa Vs. Sri Mohan, (2010) 11 SCC 441
that a reverse onus clause usually imposes an evidentiary burden
and not a persuasive burden and when an accused has to rebut the
presumption under Section 139, the standard of proof for doing
so is that of "preponderance of probabilities". Therefore, if the
accused is able to raise a probable defence which creates doubts
about the existence of a legally enforceable debt or liability, the
prosecution can fail. It was further held that 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.
16. In the present case, in order to discharge his initial burden
to prove the above mentioned ingredients, the AR of the
complainant company i.e. CW-1 relied upon his affidavit being
Ex. CW1/A and placed on record documents mentioned
hereinbefore. Ld. Counsel for the complainant submitted that the
accused has already admitted his signatures on the impugned
cheques and hence presumption of the impugned cheques having
CC No. 5344/20 7/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
been issued in discharge of debt or other liability arises in favour
of the complainant company in terms of Section 118(a) read with
Section 139 of NI Act. He further argued that the accused has
also admitted the genuineness and correctness of the impugned
cheques i.e. Ex. CW1/4 to Ex.CW1/6, bank return memo i.e.
Ex.CW1/7 to Ex.CW1/9, and the receipt of the legal demand
notice i.e. Ex.CW1/10 (Colly) and the fact that the complainant
company received no payment within 15 days of the service the
legal demand notice, duly proves all the ingredients of the
offence under Section 138 NI Act. He thus submitted that since
all the ingredients laid down under Section 138 NI Act are
fulfilled, the accused should be convicted.
DEFENCE THAT LEGAL DEMAND NOTICE WAS NOT
SENT WITHIN THE STATUTORY PERIOD OF THIRTY
DAYS FROM THE DATE OF DISHONOUR OF THE
IMPUGNED CHEQUES
17. Accused has raised the first defence that since the legal
demand notice i.e. Ex.CW1/10 (Colly) was not sent to the
accused within the statutory period of thirty days from the date of
dishonour of the impugned cheques, hence the fifth ingredient of
the offence under Section 138 NI Act is not fulfilled.
18. Ld. Counsel for the accused argued that the complainant
company has not produced any evidence to show that there were
attempts to send the legal demand notice immediately/within
reasonable time as per provisions of the N.I. Act, in the absence
of which the claim that the same was sent by e-mail cannot be
relied upon as a gospel truth, unless there is sufficient proof in
accordance with law regarding the service of notice. He further
CC No. 5344/20 8/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
argued that the admission of the receipt of the legal demand
notice does not obliterate the requirement of notice within thirty
days.
19. Per Contra, Ld. Counsel for the complainant argued that
the impugned cheques were dishonoured on 02.03.2020 and
owing to the ongoing pandemic and nationwide lockdown, legal
demand notice was sent electronically to the accused on
01.04.2020 within the statutory period. He further submitted that
the same was later sent to him via speed post on 29.05.2020
which was duly served upon him on 05.06.2020. He further
submitted that the fifth ingredient of the offence under Section
138 NI Act is duly fulfilled and accused is trying to evade his
liability by raising a hyper-technical defence. He relied upon the
copy of the legal demand notice, original postal receipt and
tracking report thereof being Ex. CW1/10 Colly in support of his
contentions.
20. It is a settled potion of law that service of notices can be
validly effected through electronic means. Taking note of the
difficulties for physical service of summons on account of
lockdown and COVID-19 pandemic, the Hon'ble Supreme Court
had allowed the service of notices, summons and pleadings etc.
via electronic means. Moreover, it is imperative to note that vide
order dated 08.03.2021 passed in In Re Cognizance For
Extension Of Limitation, Suo Motu Writ (Civil) No. 3 of
2020, directions were issued by the Hon'ble Supreme Court that
the period from 15.03.2020 till 14.03.2021 shall stand excluded
in computing the period prescribed under proviso (b) & (c) of
Section 138 of the Negotiable Instruments Act, 1881.
CC No. 5344/20 9/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
21. Reverting back to the facts of the present case, admittedly,
the impugned cheques were returned unpaid vide return memo
dated 02.03.2020. The legal demand notice was sent by the
complainant on 01.04.2020 through e-mail and on 29.05.2020
through speed post. Firstly, the service of legal demand notice
through e-mail on 01.04.2020 is a valid service being within the
statutory period. Secondly, even if only the service thrpygh speed
post is taken into consideration, by virtue of directions passed by
the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil)
No(s).3/2020 vide order dated 23.03.2020 read with order dated
08.03.2021, the computation of period for sending the legal
demand notice within 30 days from 02.03.2020 to 29.05.2020
has to be excluded for the purpose of proceedings under Section
138 of the NI Act. Hence there remains not even an iota of doubt
regarding the valid service of legal demand notice in the present
case. Accordingly the first defence of the accused is rejected and
the fifth ingredient of the offence under consideration is clearly
fulfilled.
22. In the case at hand, since the complainant has discharged
his initial burden on the basis of the documents mentioned
hereinbefore and the admission of the accused, all the other
ingredients of the offence under Section 138 of the NI Act stand
successfully established. Further, since the accused has admitted
his signatures on the impugned cheques and the fact of issuance
of the cheque from his account, thus, the presumptions under
Sections 118(a) and 139 of the NI Act arise against him. The
onus is now upon the accused to rebut the mandatory
presumptions under the NI Act by raising a probable defence to
CC No. 5344/20 10/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
show that the impugned cheque was not issued in discharge of a
debt/liability.
DEFENCE OF NO LEGALLY ENFORCEABLE
LIABILITY IN FAVOUR OF THE COMPLAINANT
COMPANY ON ACCOUNT OF PAYMENT RECEIVED
FROM KSEB
23. In order to rebut the mandatory presumptions, it is the
defence of the accused that there is no legally enforceable debt or
liability in favour of the complainant and against the accused as
on the date of issuance or presentation of the impugned cheques
as they were issued as security cheques against supply of goods
for which entire payment has been received by the complainant
company from KSEB.
24. Ld. Counsel for the accused argued that the impugned
cheques were issued in lieu of a contract of supply of goods
entered into between the accused and KSEB in furtherance of
which accused had to procure the goods from the complainant
company and supply the same to KSEB. He argued that the
impugned cheques were issued as security for the payments to be
made by KSEB against the goods supplied through the accused.
He further submitted that vide Power of Attorney dated
04.04.2019, copy of which is Mark DW-1/1, the accused had
authorised the complainant company to receive the payment
against the goods supplied directly from KSEB in place of the
accused. He argued that in terms of Mark DW-1/1, the payments
due have already been received by the complainant company
directly from KSEB and this fact has been deliberately concealed
and the impugned cheques which were issued in a blank signed
CC No. 5344/20 11/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
condition at the inception of business transaction between the
parties have been misused to file the present complaint. He went
on to state that Ex. DW-1/6 (Colly) (OSR) clearly shows that
Mark DW-1/1 (Colly) has been duly acknowledged by KSEB
and payment of Rs. 2,84,64,258/- has been paid to the
complainant company in furtherance of the same.
25. Ld. Counsel for the accused further argued that
complainant company has solely relied upon their ledger i.e. Ex.
CW-1/3 and there is no other document on record to show that
accused was liable to pay the amount of the impugned cheques as
on the date of their issuance or presentation. He submitted that
the Statement of Accounts itself does not cast liability upon the
accused when it is not supported by Purchase order or invoice
with GST details. He relied upon Section 34 of the Indian
Evidence Act, 1872 and submitted that the Statement of
Accounts being a corroborative piece of evidence, cannot be a
secondary evidence when primary records like Purchase Order
and sales invoice are absent. Moreover he argued that there is no
valid certification by the person who prepared Ex. CW1/3 for
marking it as an electronic evidence and CW-1 had also admitted
the fact that the same is not an audited one, but only an
unaudited/ uncertified extract of the account statement printed
from computer. He further submitted that the Certificate under
Section 65B of the Evidence Act issued in support of Ex. CW1/3
is also not in conformity with law and hence the same cannot be
read in to evidence.
26. Ld. Counsel for the accused further argued that the
documents produced by the accused after getting them under the
CC No. 5344/20 12/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
RTI Act are true copies of the public records kept with a
Government institution. In such circumstance he argued, that
Section 74 of the Evidence Act makes it clear that those
documents are proved even without examination of the public
officer who had prepared it.
27. Ld. Counsel for the accused further submitted that
presence of a third party i.e. KSEB in the basic transactions, on
the basis of which complainant company tries to cast liability on
accused establishes the defence case at least up to the extent of
rebuttal of presumption under Section 139. He argued that unless
the complainant establishes that accused had received payments
from KSEB and the same were not paid to complainant, there
cannot be any liability under the impugned cheques even if those
cheques were validly issued. Hence, he submitted that accused
has been successful in rebutting the mandatory presumption on a
scale of preponderance of probabilities and deserves to be
acquitted.
28. Ld. Counsel for the accused relied upon the following
judgments in support of his contentions;
(i) Regi Francis Vs. Kerala State Election Commission, WPC
No. 24037/2010.
(ii) Dattikameshwari Vs. Singam Rao Saratchandra, Cr.P
No.3031/2015.
(iii) M.S. Narayan Menon v. State of Kerala (2006) 6 SCC 39.
(iv) Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC
16.
(v) Rangappa vs. Sri Mohan (2010) 11 SCC 441 and
Rohitbhai Jivanlal Patel v. State of Gujarat & Anr. (Crl.
Appeal No. 508/19 dated 15.03.2019)
29. Per contra, Ld. Counsel for the complainant argued that
merely stating that the impugned cheques were issued as security
cheques can not come to the rescue of the accused in the light of
CC No. 5344/20 13/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
authoritative pronouncement of Hon'ble Supreme Court in Sunil
Todi Vs. State of Gujarat Criminal Appeal No.1446 of 2021
decided on 3rd December, 2021. Moving on, he argued that the
presumption of existence of a legally enforceable debt is already
in favour of the complainant company, and in order to rebut the
same the accused has raised a sham defence that KSEB has made
all the payments due to the complainant on its behalf. He
submitted that admittedly there is no contract between KSEB and
the complainant company. Infact the accused had entered into a
contract directly with KSEB and complainant company had no
privity of contract with KSEB. Moreover, no tripartite agreement
has been brought on record by the accused as claimed and Mark
DW-1/1 is a unilateral document executed by the accused which
is not sufficient to establish that the complainant company was
either authorised or that it received entire payment from KSEB
on behalf of the accused. He further argued that as per the
agreement between accused and KSEB, only accused could raise
bills and it was not legally possible for complainant to raise bills
to KSEB and recover the amount due from it.
30. Ld. Counsel for the complainant further argued that most
of the documents in support of this defence which were furnished
by the accused are copies, originals of which were never
produced before this court and neither were any attesting
witnesses examined in defence. Hence he argued that none of
such documents relied upon by the accused can be read into
evidence. He argued that there is nothing on record to even
suggest that entire payment due was made by KSEB to the
complainant company on behalf of the accused. He argued that
CC No. 5344/20 14/22
Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela
neither did the accused examine any witness from KSEB, nor did
he produce his own ledger in support of his defence.
31. Ld. Counsel for the complainant further argued that
accused materially contradicted himself at various stages of the
trial which renders his version less believable and his testimony
can not be relied upon. Ld. Counsel for the accused pointed out
the following discrepancies in the version of the accused:
"However only cheque bearing No. 359077 bears my
signature and handwriting and the rest two cheques
bearing no's 359078 and 359079 only bear my
signatures and not handwriting." (Notice U/s 251
Cr.P.C)
"They were issued as blank signed security cheques
in favour of the complainant company against the
supply of computers in three days." (Statement of
accused U/s 313 r/w 281 Cr.PC)
"The complainant company has misused the blank
cheques issued by me by filling in the details and has
filed the present complaint malafidely."
(Examination in chief of DW-1 recorded on
17.02.2023)
"Q. The cheques that are dishonoured were duly
signed and filled in by you when you tendered it to
the complainant?
Ans. No. (Vol. Only sign.)" (Cross-examination of
DW1 recorded on 23.03.2023)
****
"Q. Did you receive legal demand notice from the complainant? If yes, did you reply to it? (original shown from record) Ans. Yes. (Notice U/s 251 Cr.P.C) "7. For the reason the applicant or accused had received the Notice under section 138 of NI act for dishonour of the said cheque in question and had sent a detailed reply to the same stating the correct facts and requested the complainant to refrain from initiating any legal action." (Para 7 of application under Section 145 (2) NI Act moved by the accused) CC No. 5344/20 15/22 Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela "I also received the legal demand notice." (Statement of accused U/s 313 r/w 281 Cr.PC) "Q. Is it correct that [email protected] is operated by you? If yes, so legal demand notice dated 01.04.2020 was received by you or not? Ans. I admit that the e-mail id mentioned above is correct. However, I did not receive the said e-mail as during the covid period the domain was cancelled and e-mail id was not operative." (Cross-
examination of DW1 recorded on 23.03.2023)
32. After a careful perusal of the record and judgments relied upon by the parties and upon patiently hearing them, this court shall now advert to categorically analyzing the rival contentions.
33. Qua the defence of security cheques, it is pertinent to note that even if the same is accepted, merely stating that the impugned cheques were given as a security, does not help the accused. Reliance in this regard is placed by this court on the judgments of Hon'ble Supreme Court of India in Sampelly Satyanarayana Rao Vs. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458, Sripati Singh Vs. State of Jharkhand & Anr., 2021 SCC OnLine SC 1002 and Sunil Todi (Supra) wherein the Hon'ble Apex Court has held that merely because a cheque has been given for security purposes does not mean that there is no legally enforceable debt or liability in favour of the complainant, however, it does mean that the court has to see whether there exists legally enforceable debt or liability as on the date mentioned on the cheque or whether a legally enforceable debt or liability has arisen at the time of presentation of the cheque. It has been held by the Hon'ble Court that the accused would very much be liable u/s. 138 NI Act for issuance of a security cheque as well, if on the CC No. 5344/20 16/22 Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela date of the presentation of such cheque there has not been a prior discharge of debt, or if the cheque has not been given towards advance payment, the goods in respect of which have not been received, or if there has been change in circumstances which precludes the complainant from depositing the cheque with the bank.
34. At this juncture, it is quintessential to note that a cheque issued as a 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 in a business relationship implies something given as a pledge of payment. Hence, merely showing that the accused had given the cheque for security purposes is not sufficient and he has to raise a probable defence and has to show on the basis of preponderance of probabilities that no liability exists in favour of the complainant company to the tune of the amount of the impugned cheques.
35. Moving ahead, apropos the existence of legally enforceable debt/liability, this court has arrived at the following findings;
a) On a perusal of the testimony of DW-1, admittedly there is no dispute with respect to either the business relationship between the parties or the amount mentioned on the impugned cheques to be payable to the complainant company against the quantity of goods supplied by it.
b) During the course of the trial, accused failed to produce the tripartite agreement as claimed in his plea of defence raised at the stage of framing of notice under CC No. 5344/20 17/22 Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela Section 251 Cr.P.C. Moreover, it was averred by the accused in his application under Section 145(2) NI Act that he had sent a detailed reply to the legal demand notice, but the same was never placed on record. Hence, an adverse inference can safely be drawn against the accused in terms of illustration (g) under Section 114 of the Indian Evidence Act, 1872 which enunciates the rule that the evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it.
c) Documents i.e. Mark DW-1/1 Colly, Mark DW-1/2, Mark DW-1/3, Mark DW1/4 Colly, and Mark DW1/5 Colly, all being copies, cannot be read into evidence.
d) As far as Ex. DW-1/6 Colly (OSR) is concerned, the same are two replies to the RTI applications filed by the accused with KSEB. The reply of KSEB dated 08.11.2022 at page 1 of Ex.DW1/6 (Colly) (OSR) mentions an amount of Rs. 6,23,196/- paid to the complainant company against Purchase Order dated 30.06.2018 for invoice dated 12.04.2019 vide cheque dated 18.06.2019. However the said amount is clearly reflected in the ledger of the complainant company i.e. CW-1/3 at page 01 at entry dated 18.06.2019 itself.
e) The second reply of KSEB dated 26.11.2022 at page 2 of Ex. DW-1/6 Colly (OSR) only mentions a consolidated amount of Rs. 2,84,64,258/- allegedly paid to the complainant company by KSEB in furtherance of power of attorney i.e. Mark DW1/1 Colly, however the same neither mentions the invoices or purchase orders, nor CC No. 5344/20 18/22 Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela the dates on which the said payment was released. It is unclear as to when and in how many installments and against which invoices the said payments were released. Even if the payment as acknowledged in the said letter is taken into account, a bare perusal of Ex. CW-1/3 would reveal that post the execution of the alleged Mark DW-1/1 Colly on 04.04.2019, parties have transacted for a huge amount and the amount received by the complainant company from the accused, or for that matter KSEB, was much more than the amount as aforesaid and the outstanding liability has been computed after taking into account the intermittent payments being made. Hence in the absence of the RTI application filed by the accused it is difficult of ascertain as to payment for which period is being referred to in its reply and which information was actually sought to be disclosed by him through the same.
f) Since no tripartite agreement has been placed on record, hence this court has proceeded on the premise that the same does not exist which goes on to mean that KSEB and the complainant company had no agreement whatsoever with respect to the present transaction. Even if the execution of Mark DW1/1 i.e the Power of Attorney is presumed in affirmative, the same at best only proves that the accused authorised the complainant company to receive the payment from KSEB, however whether the said payment was ever received is not proved by the accused as payments received by the complainant company after the execution of Mark DW1/1 are being CC No. 5344/20 19/22 Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela reflected in the name of Zigma Solutions and not KSEB. There is no shying away from the fact that accused can legally appoint an agent to discharge his liability but it has to be shown with cogent evidence that the liability was 'actually' discharged by such agent.
g) In such a situation the best witness in defence would have been some official or authorised representative or accounts officer from KSEB who could have clearly explained the total payment if any, made by KSEB to the complainant company on behalf of the accused. However, the accused failed to examine any such witness to establish that his liability was completely discharged by KSEB on his behalf.
h) Accused during his cross-examination clearly admitted his liability to pay the amount of the impugned cheques towards the complainant company, however his only defence is that the said liability has been discharged by KSEB on his behalf, which was never proved by him. The relevant extract of his cross-examination conducted on 23.03.2023 is as follows :-
"Q. Is it correct that you are liable to pay to the complainant company because actually the material was purchased in your name? Ans. Yes, but KSEB has paid the amount on my behalf to the complainant company in terms of Mark DW1/1."
i) Although the facts stated by the accused in his plea of defence under Section 251 Cr.PC and his statement under section 313 Cr.P.C are not substantive pieces of evidence, however, they are relevant to establish the CC No. 5344/20 20/22 Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela contradictions in versions of the accused at various stages of the trial. Perusal of the record reveals that there are glaring contradictions and improvisations in the versions of the accused throughout the trial as pointed by Ld. Counsel for the complainant company which consequently renders his testimony less worthy of credit and does not inspire the confidence of the court.
j) It is also astonishing to observe that no steps were taken by the accused to receive back his security cheques after the execution of power of attorney i.e. Mark DW1/1. The accused neither issued any stop payment instructions to his banker with respect to the impugned cheques nor lodged any complaint against the alleged misuse of the said cheques. Such a conduct causes doubt to lurk around the defence of the accused.
k) Lastly, in view of the categorical admissions of the accused, any objections of Ld. Counsel for the accused regarding the absence of purchase orders or invoices, or the quantum of liability become irrelevant, more particularly in the light of the fact that copy of the purchase orders and tax invoices were placed on record by the accused himself as a part of Mark DW1/4 Colly. It is also pertinent to note that no question or suggestion whatsoever was put to CW-1 regarding the invoices during the course of his cross examination.
36. In view of the foregoing discussion, this court has arrived at an irresistible conclusion that the accused has miserably failed to demolish the case of the complainant company and tilt the CC No. 5344/20 21/22 Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela scales in his favour even on a scale of preponderance of probabilities, while the complainant company has clearly succeeded in proving his case beyond reasonable doubt. Consequently, the existence of legally enforceable debt or liability in favour of the complainant company and against accused stands proved in terms of Sections 118 read with 139 of the NI Act and his second defence also does not appeal to this court and is accordingly rejected.
FINAL ORDER
37. In view of the aforesaid discussion, the accused Jayachandrakumar Raveendran Nair Suseela S/o Raveendran Nair is held guilty and is convicted of the offence under Section 138 of the Negotiable Instruments Act, 1881.
38. Copy of this judgment be given to the convict free of cost as per rules.
39. Convict be now heard on the quantum of sentence.
ANAM Digitally signed
by ANAM KHAN
Date: 2023.06.27
KHAN 15:04:40 +0530
Announced in open (Anam Rais Khan)
Court on 27.06.2023 MM(NI Act)-01/NDD/RACC/ND
This judgment contains 22 signed pages and each page has been signed by the undersigned.
CC No. 5344/20 22/22Iris Computers Ltd Vs. Jayachandrakumar Raveendran Nair Suseela