Delhi District Court
Have Been Laid Down In Jugesh Sehgal vs . Shamsher Singh Gogi 2009 (9) on 3 May, 2019
IN THE COURT OF SH. ASHOK KUMAR, MM05 (NI ACT)
SOUTH EAST DISTRICT, SAKET COURTS, NEW DELHI
CC No. 612210/16
U/S 138 NI Act
M/s Diligent Farms Developers Pvt. Ltd.
House No. 63, Chah Shor, Rampur,
Uttar Pradesh244901,
Through its Authorised Representative
Sh. Hitesh Juneja
D17, Raja Garden,
New Delhi110015. .......................Complainant
Versus
1 M/s SEW Infrastructures Limited.
Through Sh. Raja Sekhar Valluripalli,
Managing Director & Authorised Signatory,
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
2 Raja Sekhar Valluripalli,
Managing Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
Also at 501, Jyothi Manor Plot No. 41,
Srinagar Colony, Hyderabad500873
(Dropped vide order dated 20.11.2017)
C.C. No. 612210/16 Page1of 25
3 Raj Kumar Valluripalli,
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
Also at Plot No. 270H, Road No. 10,
jubilee Hills, Hyderabad500033.
(Dropped vide order dated 20.11.2017)
4 Anil Kumar Sunkara,
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
Also at Plot No. 44, Flat no. 302 Padmaja Paradise,
Srinagar Colony, Hyderabad500073
(Dropped vide order dated 20.11.2017)
5 Thirpath Reddy Mula,
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
Also at Plot No. 184, Road no. 15,
Jubilee Hills, Hyderabad500033.
(Dropped vide order dated 20.11.2017)
6 Gangadhara Rao Yalamanchili,
Director,
SEW Infrastructures Limited
C.C. No. 612210/16 Page2of 25
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
Also at Plot no. 417/1, Road no. 18,
Jubilee Hills, Hyderabad500033.
(Dropped vide order dated 20.11.2017)
7 Balakrishnarao yalamanchili
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
Also at Plot no. 167, Road no. 13A,
Jubilee Hills, Hyderabad500033.
(Dropped vide order dated 20.11.2017)
8 Rameshchandra bose Tummula,
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
Also at Flat no. 101, Vamsirishi Residency,
H.No. 63865/B, Greenlands Xrds,
Ameer Hyderabad500004.
(Dropped vide order dated 20.11.2017)
9 Sunil Chawla,
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
C.C. No. 612210/16 Page3of 25
Also at C41, Sector 44, Noida 201303
(Dropped vide order dated 20.11.2017)
10 Mr. Yadav Rahul Kumar,
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
Also at The Haven Nalagarh Road, Pinjore134102.
(Dropped vide order dated 20.11.2017)
11 Srinivas Chitta,
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
(Dropped vide order dated 20.11.2017)
12, Bhaskara Rao Amara,
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
(Dropped vide order dated 20.11.2017)
13 Hima Bnd Myneni,
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
C.C. No. 612210/16 Page4of 25
Bagumpet, Hyderabad, Telangana500016,
Also at 63865/B Greenlands, 507,Vamsirishi Residency,
Begupet, Hyderabad500016.
(Dropped vide order dated 20.11.2017)
14 Satyanand Jamily,
Director,
SEW Infrastructures Limited
63871 " Snehalata", Greenlands Road,
Bagumpet, Hyderabad, Telangana500016,
Also at 82293/82/B/18/4, Road No. 5, Jawahar Nagar Colony,
Jubilee Hills, Hyderabad500033.
(Dropped vide order dated 20.11.2017) .........................Accused.
Offence Complaint of or proved. : Section 138 of Negotiable
Instrument Act.
Plea of accused : Pleaded not guilty
Date of Institution : 06.06.2016
Date of Reserving order : 01.05.2019
Final order : Convicted
Date of pronouncement : 03.05.2019
JUDGMENT
FACTS OF THE CASE 1 The facts of the case as per the complaint are that the accused in discharge of liability towards business transaction issued the cheques in question bearing No. 477489 dated 20.01.2016 for Rs. 1.50,000,00/ and cheque bearing no. 477478 dated 20.01.2016 for Rs. 2,00,000,00/ drawn on Corporation Bank in favour of the complainant which upon presentation got dishonoured for the C.C. No. 612210/16 Page5of 25 reason " Funds Insufficient" and even after the expiry of statutory period of 15 days of service of legal notice dated 21.04.2016 did not pay the cheques amount.
It is pertinent to discuss the relevant facts of the case in proper detail here. As per the complaint and affidavit of evidence filed by CW1 Hitesh Juneja who is the authorized representative of the company as per the duly exhibited board resolution, the complainant company entered into an MOU with the accused company SEW Infrastructure Ltd.( hereinafter referred to as accused/promoters) alongwith other companies to transfer 100% shares of the accused/promoters in SEW LSY Highways Ltd., a Special Purpose Vehicle (hereinafter SPV). The SPV was created for the purpose of designing, building, financing and operating the project granted to the accused company by Uttar Pradesh State Highways Authority (hereinafter referred to as The Authority) and ultimately exclusive right and license was granted to the SPV for completing the project. The project involved augmentation of roads from 10.911 kms to 207.10 kms on the Delhi Uttarakhand Boarder Section of the State Highway No. 57. However, for economic reasons the accused company decided the divest their stake in the SPV by transferring 100% equity in favour of the complainant by entering into an MOU dated 01.06.2015 with the investors/complainant company alongwith co investor company namely Prasad & Company ( Project Works) Ltd. Said MOU has also been duly exhibited alongwith two addendums to the MOU. The economic reasons/difficulty has been explained by DW1, AR for the accused company in his examination in chief dated 16.03.2019. It is deposed that the project work for augmentation of the road on highway no. 57 got started but due to compulsory reasons like failure to obtain clearance from the Forest Department etc, the work had to be stopped and their company wanted to exit from the project C.C. No. 612210/16 Page6of 25 so that the resources may be utilized for other sites. The accused company started to look for prospective buyers of the project and in this process the complainant company contacted the accused company/promoters and thereafter MOU dated 01.06.2015 was signed. One of the material clauses in the MOU was that the total amount of transfer for purchasing the shares was set to the tune of Rs. 140 crores and this amount was to be given in two tranches. The first tranche was of Rs. 103.6 crores and the second tranche was of Rs.36.40 crores. The first tranche was to be paid in 5 various installments to be disbursed by the complainant in favour of the accused company at various stages. Out of this, first installment of Rs. 25 crores was to be paid at the time of execution of MOU. This first installment was duly paid to the accused company by way of RTGS /NEFT which is reflected in the account statement filed by the complainant and duly exhibited. The first amount of Rs. 19 crores was disbursed on 04.06.2015 and balance payment of Rs. 6 crores was made on 5.6.2015 ( as per cross examination dated 24.07.2018 of CW1 and also reflected in the duly exhibited account statement). Moreover as per MOU Clause 5.3, it was the duty of the accused/promoters to obtain approval of The Authority and the money lenders. Further as per Clause 4.8 4.9, in case of non permission/non approval by the authority and the money lenders, the accused was to refund the consideration receipt as advance within 15 days of the expiry of the last date set by the MOU for obtaining the said approval. When the accused failed to get the requisite approval as per the MOU, the amount given as advance by the complainant became refundable and the accused initially made payment of Rs. 1.5 crores to the complainant through RTGS. In order to obtain settlement with the complainant, the accused company alongwith the covering letter dated 11.01.2016 duly C.C. No. 612210/16 Page7of 25 exhibited on the record, issued various cheques for the remaining sum amounting to Rs. 23,50,00,000/( Rs. Twenty three crores fifty lakhs). These cheques got dishonoured for the reasons funds insufficient and are the subject matter of the 5 connected complaint cases pending in this court. TRIAL PROCEEDINGS 2 Thereafter, the complainant filed the complaint under Sec. 138 NI Act after the accused failed to make the payment within 15 days of the receipt of legal notice. On the said facts, the accused was summoned and notice under Sec. 138 NI Act was framed against the accused no. 1 and 2 only to which they pleaded not guilty and claimed trial. Here it is pertinent to mention that though all the accused were summoned after taking cognizance of the offence, however vide order dated 20.11.2017, Ld. Predecessor discharged all the accused except accused no. 1 and 2 and trial was directed only against accused no. 1 and 2 after notice of accusation was put to them. Thereafter, case was fixed for complainant evidence. In support of present case, complainant was examined as CW1 and vide order dated 18.08.2018 CE was closed. Statement of accused was recorded and accused preferred to lead evidence in defence and vide order dated 16.03.2019 accused examined only DW1 G.S Rana who is the AR of the accused company as witness and closed the DE. . Thereafter, final arguments were heard. The following documents were relied by the complainant in her evidence :
3 Complainant proved the following documents in his presummoning evidence : i The cheque in question is Ex. CW1/F and G. C.C. No. 612210/16 Page8of 25 ii The bank returning memo is Ex. CW1/H and I. iii The legal notice and postal receipts, Courier receipt and AD card are Ex. CW1/J to Ex. CW1/L. iv The Affidavit in evidence of complainant is Ex. CW1/X. v The complaint is Ex. CW1/1.
vi Complaint against the accused, copy of MOU and Addendums dated 01.06.2015, bank statement of the complainant and bank letter dated 11.01.2016 are Ex. CW1/A to Ex. CW1/E. vii The authority in favour of CW1 to execute the MOU dated 01.06.2015 as Ex. CW1/D1 and Ex. CW1/D2 dated 27.05.2015.
Relevant Law 4 The ingredients to prove the commission of offence under Sec. 138 NI Act have been laid down in Jugesh Sehgal Vs. Shamsher Singh Gogi 2009 (9) SCALE 455. The relevant portion of the said judgment reads as under:
"9. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
C.C. No. 612210/16 Page9of 25
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice"
Section 139 NI Act.
Presumption in favour of the holder It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
Further, explanation to section 138 of the ActFor the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
5 ARGUMENTS HEARD AND DEALT WITH I have heard the submissions of both the Ld. Counsel for the complainant as well as the accused.
5a Before I deal with the merits of the case, it is firstly necessary to deal with certain preliminary objections raised by the counsel for accused relating to the C.C. No. 612210/16 Page10of 25 maintainability of the complaint and on the basis of which the counsel submits that at the stage of judgment, the accused is entitled to be acquitted.
(i) It is submitted that the complaint has not been filed within the court of competent territorial jurisdiction. My attention is drawn towards the cheques in question and the memo of dishonour which show that the cheques were presented in Noida Branch of HDFC bank and further argued that it is because the accused have an account in Noida, the complaint should have been filed in the competent court in Noida. However, this argument is totally unsupported by the documentary evidence and the testimony of CW2 the concerned bank official from Nehru Place Branch which falls within the jurisdiction of this court. The cheques show the stamp of New Friend Colony branch which also falls within the territorial jurisdiction of this court. Besides this, the returning memo duly exhibited have a note contained in them to the effect that the reason for dishonour has been mentioned on the advice/instructions of the drawee bank by the clearing branch of HDFC Bank which is in Noida. Thus it is clear that Noida Branch of HDFC Bank is only a clearing branch and is not the branch of complainant where the bank account is maintained. The testimony of CW2 who is the Branch Manager of HDFC Bank Nehru Place also clarifies that the cheques in question were presented at Nehru Place Branch and not at Noida which is only a WBO Branch i.e. Wholesale Banking Operations Branch which handles all the cheques of Delhi and NCR regions for clearance. He further clarifies that firstly the cheques were presented at New Friends Colony Branch and thereafter at Nehru Place Branch and that the complainant company has account only at Nehru Place Branch and not at Noida. He further submits that the account number of the complainant company in the present case i.e. C.C. No. 612210/16 Page11of 25 13742000002387 is at Nehru Place Branch where the cheques were presented and that he is making the statement after checking the records of his branch though he has not brought the documents. The defence counsel has not disputed that the said account number is not at Nehru Place Branch and the said account number is duly mentioned in the returning memo relied by the complainant showing the dishonour of the cheques. Further the accused has not pressed for the production of documents to show that the bank account maintained by the complainant is not at Nehru Place Branch. In my view the complainant cannot been expected to bring the documents every time when a question to put to him in the cross examination and the adverse inference under Illustration (g) to Section 114 of Evidence Act stating that the evidence if not produced would be presumed to be unfavourable to that party, is applicable only when direction is sought from the court to produce the document and there is consequent failure to produce the same. Further the bank witness has not refused to answer any question so as to attract the presumption in Illustration (h) to Section 114 of Evidence Act that if a witness refuses to answer a question, it would be unfavourable to him. There is no reason for this court to believe that CW2 Bank Manager has any reason to depose in favour of the complainant falsely even after having taken oath to speak the truth in the court to his own detriment. It is further pertinent to mention that Ld. Senior Advocate for the accused also raised objection that CW2 has not filed any authority letter issued by HDFC Bank Nehru Place in his favour to depose on behalf of the bank because CW2 himself is a Branch Manager and he does not need any authority to depose on behalf of the said bank branch. Thus in view of aforesaid discussion, it is crystal clear that there is no dispute that complainant company is maintaining its account at Nehru Place C.C. No. 612210/16 Page12of 25 which falls within the jurisdiction of this court.
(ii) Ld. Sr. Advocate for the accused has also raised a preliminary objection that neither CW1 Hitesh Juneja has filed any authority as per law to depose on behalf of the complainant company nor he has any personal knowledge on behalf of the complainant company so as to be called a competent person to file and prosecute the complaint on behalf of the complainant company. Not only this but the Ld. Sr. Counsel for accused has further raised an objection that CW1 has failed to file on record a legally executed authority to execute the MOU dated 01.06.2015 on behalf of the complainant company alongwith the addendum agreements which forms the fulcrum of prosecution case. As far as the authority to file and prosecute the complaint is concerned, it is submitted that to be binding on the complainant company, the authority letter should have been superimposed with the seal of the company which is missing in this case. Further the person who has executed the authority in favour of Hitesh Juneja CW2 namely Navneet Saxena who is the director of the complainant company has also failed to appear in the witness box to prove the authority executed on the basis of Board Resolution adopted on 09.04.2016. Objection is taken to the authority letter issued in favour of CW1 to enter into MOU dated 01.06.2015 because two such authority letters have been filed by the witness, one containing the seal of the company and another not containing the seal of the authority and one is executed at 10 pm and another is executed at 10 am on 27.05.2015. In my view these objections are not at all sustainable because as per settled law laid down in a catena of decisions given by the Hon'ble Apex Court and Hon'ble High Courts, objection regarding mode of proof can be taken only at initial stage when the evidence is tendered as against the admissibility of documents regarding which C.C. No. 612210/16 Page13of 25 objection can be taken at any stage including the appeal. Not even a single question has been asked from the witness CW1 as to why proper authority with the seal of the company and the original Board Resolution has not been produced nor the question as to why the alleged person having authority to execute the authority letter in favour of CW1 has not appeared in the witness box. This objection has been raised for the first time during the final arguments which cannot be allowed once the copy of the authority letter has been allowed to be exhibited. In such circumstances the objection regarding mode of proof is deemed to be waived by the accused. For the sake of reference one of such judgment of Hon'ble Apex court laying down this ratio is titled as R.V.E Venkatachala Gounder Vs. Arulmgu Viswesaraswami & V.P. Temple & AR Appeal (Civil) 10585 of 1996. In view of this reasoning the argument of Ld. Sr. Counsel that no authority has been filed on record to show that legal notice was issued on the instruction of CW1 is again not sustainable because this authority letter has been duly proved by exhibit mark without objection from accused and takes within its sweep every kind of act which can be done by the authorized person to secure the interest of the complainant company before and during litigation. The said authority uses such words as authorizing to take all or any kind of legal or other action or to file necessary notice, take all proceeding in connection with the litigation before any court of law or tribunal. Also the argument of Sr. Advocate for accused that CW1 has himself denied issuing instructions for drafting legal notice in his cross examination dated 24.07.2018 contrary to the contents of legal notice does not disprove issuance of legal notice on behalf of complainant company. The reason for this minor contradiction can be attributed to lapse in memory as it was issued before filing of the case way back C.C. No. 612210/16 Page14of 25 in year 2016 and oral testimony was recorded in the year 2018. As far as objection pertaining to the authority to execute the MOU dated 01.06.2015 is concerned, it has not been shown by the accused during the cross examination whether both the documents authorizing CW1 to enter into an MOU is false. Even otherwise the accused in the statement u/s 313 Cr.P.C as well as the AR on behalf of the accused company have admitted the execution of MOU and the additional agreements and also the fact that advance money was paid by the complainant in sum of Rs. 25 crores out of which Rs. 1.5 crores was reimbursed by the accused due to the failure in carrying out the transaction for transfer of the shares in the SPV Company which also finds mention in para 6.2 herein below. It is further argued by Ld. Sr. Counsel for the accused that CW1 does not have any personal knowledge about the case and no person can depose in court who does not have personal knowledge of the facts or the transaction not entered into or witnessed by him. To buttress his arguments the Ld. Defence counsel has drawn my attention towards certain statements made by CW1 in his cross examination which finds mention as "The cheques in question filed in all cases were not handed over to complainant company in my presence nor I attended any such meeting in which the talks for handing over the said cheques took place....... I had never role to play in day to day affairs of the complainant company.........I firstly met with the official of complainant company at the time of signing the MOU..........I cannot tell whether complainant company has account with HDFC Bank Ltd. WBDO, 3rd Floor, A111, Sector4, Noida (Vol.) Complainant company has one account with HDFC Bank but I do not remember the address of the said branch........I cannot tell in which branch C.C. No. 612210/16 Page15of 25 these two cheques were presented for encashment. The legal demand notice filed in all cases including in CC no. 612210/16 was issued at the instruction of management of complainant company and not at my instructions....... I personally did not make any communication in writing on behalf of complainant company with the accused company after signing of MOU. No communication in writing was made to accused company at my instruction (Vol. It was done at the instruction of management of complainant company)....... The cheques in question filed in all cases were not handed over to complainant company in my presence nor I attended any such meeting in which the talks for handing over the said cheques took place " in the cross examination dated 21.04.2018 , 01.06.2018 and 24.07.2018. However, the said submission of Ld. Defence counsel is not to the point because whatever CW1 has deposed does not pertain to any facts personally deposed by him but only from the documents relied by the complainant company in support of its case. During the whole cross examination of CW1 not even a single question has been asked pertaining to the personal knowledge or the background of transaction because the MOU dated 01.06.2015 alongwith the two additional agreements are self contained and complete for the purpose of complaint. Whatever CW1 has deposed arises out of the MOU to which he is a signatory and every question has been satisfactorily answered by him as to how the liability of the accused company arose and as to how the prosecution of accused company started. 6 Let us now examine whether the complainant has proved the necessary ingredients of the offence under Section 138 of the Act or not. 6.1 The first ingredient of the offence stands proved as original cheques duly C.C. No. 612210/16 Page16of 25 exhibited as Ex. CW1/F and Ex. CW1/G are placed on record and issuance of same is admitted by the accused in statement recorded u/s 313 Cr.PC. It is settled law that a signed cheque by the account holder is a complete instrument and the rest of the portions of the cheque can be filled by the complainant. Even otherwise during whole of the trial i.e. cross examination of complainant and the defence evidence, the accused has never taken a defence that he has not issued the cheques. Instead the defence is that the cheques were issued for security purpose. Hence the first ingredient stands proved against the accused. 6.2 The second ingredient of the offence is that the cheque must have been issued in discharge of legal liability. As the signatures on the cheque are admitted, the presumption raised under Section 139 of the Act become applicable and the issuance of cheque in discharge of the legal liability stands proved. The law on this point has been succinctly laid down by the Hon'ble Apex Court in Rangappa v. Sri Mohan AIR 2010 SC 1898.
In view of the aforesaid law, the presumption under Sec. 139 NI Act works in favour of the complainant once he files the necessary documents like the dishonored cheques, returning memo, legal notice and delivery proof and avers that the cheques were issued for legally enforceable debt or liability which the accused has failed to pay despite expiry of 15 days of the delivery of legal notice. In the present case the complainant has led his evidence by way of affidavit and after framing of notice the case was adjourned for CE. In the present case the complainant not only has the presumption u/s 138 NI Act read with Section 139 NI Act in his favour of but the documents filed in his support which went unrebutted by the accused. The complainant company has relied upon the duly exhibited MOU dated 01.06.2015 between the accused company and complainant C.C. No. 612210/16 Page17of 25 company entering the transaction as mentioned above in detail. As per this MOU it was the responsibility of the accused company/promoters to obtain approval from The Authority and money lenders for the transfer of shares in the SPV from the accused company to the complainant company. Further as per MOU in case of failure of the accused company to obtain approval of the share transfer transactions up to the specified/cut off date, the accused company was liable to refund the amount. The amount of Rs. 25 crores was given as advance by the complainant company to the accused company/promoters for the purchase of shares which is duly proved by the exhibited account statement. It is fairly admitted by the complainant company in their pleading that Rs. 1.5 crores were refunded but for the remaining amount the covering letter dated 11.01.2016 alongwith the cheques in question for discharge of part liability issued by the accused company. In this covering letter it is clearly admitted by the accused company that the cheques in question had been issued as full and final settlement against the advance received from the complainant company for sale of share holding in the SPV namely SEW LSY Highways Ltd as the transaction did not go through. This letter is also proved being exhibited in evidence The MOU shows that it was the responsibility of the accused company to obtain the said approval and as per the averment of complainant company, the accused company failed to obtain the approval of The Authority and the money lenders for carrying out the transaction. In fact accused no. 2 who is the MD of the accused no. 1 company did not even step in the witness box to deny the case of the complainant that there was any failure on the part of the complainant to carry out the transaction due to which the cheques which are alleged to be issued for the security purpose as per the defence pleaded u/s 313 CrPC and that security cheques were not liable to be C.C. No. 612210/16 Page18of 25 encashed. In fact only Sh. Gulab Singh Rana stepped into the witness box, on behalf of accused company and there is clear admission on his part consistent with the MOU that it was the responsibility of the accused company to obtain the approval and that there was failure on the part of the accused company to do so. Though a superficial stand was also taken by DW1 that the complainant company/investor was to cooperate in obtaining the approval but the MOU only shows that the complainant company was only liable for smooth transfer of shares and to provide assistance to the SPV/promoters/accused company in seeking the approval but it does not say that it was responsible for obtaining the approval. There is a huge difference between the meaning of word assistance in doing a work and in bearing the responsibility of the work. The said admission of DW1 finds mention in his testimony dated 16.03.2019 as " As per MOU joint venture companies were to obtain approvals from authorities for the said deal with the corporation of the investors in which investors were supposed to supply information/documents which they did not corporate.........(sic) I am not aware as to who approach whom to take over the project. Joint venture companies failed to take approval from concerned authorities for transferring the said project to investors. (Vol. Because investors did not cooperate). I have no communication with me to prove that the joint venture companies communicated with investors to corporate...(sic) and to provide necessary information/documents. (Vol. Orl communication was made in this regard)". It is clarified that it appears that while typing the testimony, a spelling mistake occurred by typing 'corporate' instead of word 'cooperate' which have been indicated in the quoted testimony. Clause 4.8 read with 4.9 and 5.1 clearly show C.C. No. 612210/16 Page19of 25 that it was the responsibility of the promoters in seeking approval of the authority and the money lenders for including the investors in the project and the consequential transfer of shares. On the other hand Clause 5.2 only makes the complainant company/investor duty bound to provide assistance in obtaining the approval. It is not described by accused as to whether any cooperation was sought from complainant company in obtaining approval of The Authority and money lenders and in what manner cooperation was sought and that it was not provided. Hence, the duly exhibited MOU, the letter of the accused dated 11.01.2016 and the admission on the part of DW1 completely clinch the case in favour of the complainant. The complainant has relied on a complete set of documents to show that the advance was given as per the commitment in sum of Rs. 25 crores duly reflected in the statement of accounts, the cheques presented, their dishonour on presentment, issuance of legal notice and the failure of the accused to pay the amount within the statuary time limit. During the lengthy cross examination of CW1 as AR of complainant company, the accused could not elicit any adverse admission on the part of complainant upon their case that the cheques were not issued for a legally recoverable liability. In fact CW1 has strongly emphasized that the accused company was liable to pay on the cheques in question because they failed in their responsibility to obtain the approval which finds mention as " Ques. I put it to you that it was the responsibility of complainant company to obtain approval from ROC and UPSHA? Ans. The responsibility to obtain approval from UPSHA was of accused company. It was responsibility of complainant company to obtain approval from ROC at the time of purchase of shares" in the cross examination of CW1. The accused persons have also admitted in their explanation u/s 313 CrPC that the MOU was C.C. No. 612210/16 Page20of 25 executed, advance was received pursuant to the MOU from the complainant, cheques were issued & demand notice was received. Only defence is taken is that the letter dated 11.01.2016 admitting liability was neither issued nor this letter was proved but no effort was made during the course of the trial to disprove the said letter or to examine Handwriting Expert in this regard. Ld. Sr. Counsel has further tried to challenge the admissibility of this letter by submitting that in the post summoning evidence CW1 has relied upon certain set of documents but this document has only been marked and not exhibited because this document/letter dated 11.01.2016 as stated by the accused in statement u/s 313 Cr.PC was never issued. However, this argument is against the record because during the cross examination of DW1/AR on behalf of accused company dated 24.07.2018 this document was specifically put as a suggestion to him but except bare denial about its issuance, this letter could not be disproved by cogent evidence. Even otherwise the accused company could not deny the payment of Rs. 1.5 crores in part discharge of liability towards the advance given by the complainant company of Rs. 25 crores and received by the complainant company before the issuance of the cheques in question. It is pertinent to mention that the accused in his examination under 313 Cr.PC has admitted that the accused company was not the only party which received the advance amount of Rs. 25 crores but the said amount was paid to the consortium as per MOU dated 01.06.2015, Prasad & Company was the another member of consortium to refund this advance amount. Hence, the letter admitting liability is duly proved. This letter clearly supports the case of the complainant that there is legally recoverable liability in favour of the complainant company only arising against the accused company and that the defence of the accused that the advance of Rs. 25 crores C.C. No. 612210/16 Page21of 25 was made not only by the complainant company but also by co investors company namely Kidar Realtors & Developers Private Ltd is not sustainable. This letter totally fortifies the case of the complainant in this regard that the amount towards which the cheques in question were issued for part discharge of liability was payable only to complainant company & not to Kidar Realtors & Developers Private Ltd. Hence this ingredient stands proved. 6.3 The third ingredient of the offence is that cheque must be presented to the bank within a period of three months from the date mentioned on it. The cheque are Ex. CW1/F and Ex. CW1/G and which were returned back unpaid on 08.04.2016 and cheques is of dated 20.01.2016. So it is evident that same were presented for payment within the statutory period of three months. 6.4 The fourth ingredient of the offence is that the cheque(s) must be returned unpaid. The cheques were returned unpaid for the reason " Funds Insufficient"
The computer generated bank returnmemos are Ex. CW1/H and Ex. CW1/I placed on record show dishonour of cheque. Though the presumption u/s 146 NI Act will not be applicable to presume the fact of dishonour of cheque as the return memos are computer generated and not originals but during course of the trial the accused has not taken this defence at all and has infact admitted the dishonour of the cheques in his statement under 313 Cr.PC while taking the defence that the cheques were security cheques. Even otherwise the accused has not taken the objection as to why said returning memos do not bear the official mark of the bank denoting that the cheques have been dishonoured nor any objection has been taken as to why the computer generated memos are not supported by any certificate u/s 65 B which is mode of proof of electronic evidence. As above mentioned it is settled law that objection regarding mode of proof has to be taken C.C. No. 612210/16 Page22of 25 at initial stage of the trial and if not taken, the objectioin is deemed to be waived. Hence, the returning memos of dishonour of cheques Ex. CW1/H and Ex. CW1/I are duly proved.
6.5 The fifth ingredient of the offence is that the demand notice must be issued to the accused within 30 days of the intimation of dishonour of cheque and same be served upon the accused. The accused has clearly admitted in his in statement recorded u/s 313 CrPC regarding receipt of legal notice. Hence, this ingredient also stand proved.
6.6 The last ingredient is that the accused must not have made the payment of the cheque amount within fifteen days of the receipt of legal notice. It is clear that the accused did not make the payment within 15 days and that is why the complainant has filed the case.
7 In view of the foregoing discussion it is proved that the cheques were presented against a legally recoverable liability in favour of the complainant and the cheques got dishonoured for reason of " Funds Insufficient" the cheques were drawn and issued on account of the accused and for which payment was not made within the period of 15 days of the receipt of legal notice. DECISION
8. In view of the above discussion, the accused no. 1 company and accused no. 2 are convicted for the offence under Sec. 138 NI Act. Let accused be separately heard on the point of sentence.
Announced in the open (ASHOK KUMAR)
Court on 03.05.2019 MM05(NI ACT)SOUTH EAST DISTRICT,
SAKET COURTS, NEW DELHI
C.C. No. 612210/16 Page23of 25
IN THE COURT OF SH. ASHOK KUMAR, MM05 (NI ACT)
SOUTH EAST DISTRICT, SAKET COURTS, NEW DELHI
CC No. 612210/16
U/S 138 NI Act
M/s Diligent Farms Developers Pvt. Ltd. .......................Complainant
Versus
1 M/s SEW Infrastructures Limited.
2 Raja Sekhar Valluripalli, ...................Convicts
ORDER ON POINT OF SENTENCE
Present: AR of complainant in person with Ld. Counsel Sh. Pradeep Dahiya.
AR of accused no. 1 company and accused no. 2 in person alongwith Ld. Counsel Sh. J.K.Jha.
Vide separate judgement of dated 03.05.2019 the accused no.1 company and accused no. 2 have been convicted for commission of offence u/s 138 of N.I. Act for nonpayment of cheque amounting to Rs. 3,50,000,00/.
It is stated by the Counsel for accused/convict no. 2 that he is aged about 46 years, having family to support and a businessman by profession. It is further stated that a lenient view may be taken against the convict while imposing the sentence and convict be not sentenced to imprisonment. Counsel for convict submits that convict is not a previous convict in any offence.
In view of the fact that the matter is pending since year 2016 and is more than 2 years old and keeping in view the fact that the cases u/s 138 NI Act are unduly clogging the dockets of the courts leading to docket explosion and C.C. No. 612210/16 Page24of 25 extraction of judicial time which could have been given to other cases and on the other hand due to the dishonest issuance of cheque, the same is eroding of credibility of such instruments, this court does not deem it necessary to extend the benefit of Probation of Offender Act to the accused.
In view of the facts and circumstances the convict/accused no. 2 is directed to undergo simple imprisonment for a period of 4 months and also directed to pay fine of Rs. 7,00,000,00/ ( Rs. Seven Crores only i.e. the double of the cheques amount )and in default of payment of the same, the convict shall suffer simple imprisonment for one month for offence punishable u/s 138 NI Act. It is pertinent to mention that accused no. 1 is the company M/s SEW Infrastructures Ltd. which is only a juristic entity and hence accused no. 1 company which also stands convicted alongwith accused no. 2 Managing Director Raja Sekhar Valluripalli and is jointly and severally liable as far as payment of fine is concerned. Since the complainant has suffered lot of harassment and has had to launch and sustain prosecution for a long period by denial of legally recoverable amount due to him, hence the amount of Rs. 6,90,000,00/ be paid as recompense to him. Further in respect of the remaining amount Rs. 9,00,000/ be deposited in the Army Relief Fund accessible through the website www.bharatkeveer.gov.in and Rs. 1,00,000/ in court as fine. Copy of judgment and order on sentence be given to the convict free of cost.
Announced in the open (ASHOK KUMAR)
Court on 03.05.2019 MM05(NI ACT)SOUTH EAST DISTRICT,
SAKET COURTS, NEW DELHI
C.C. No. 612210/16 Page25of 25