Delhi District Court
Iii)Returning Of The Cheque Unpaid By ... vs . on 14 May, 2015
IN THE COURT OF SHRI PUNEET PAHWA
METROPOLITAN MAG ISTRATE 01 (N.I. ACT)
PATIALA HOUSE COURTS : NEW DELHI
M/s On Time Travels Pvt. Ltd.
1205, Rohit House, 3 Tolstoy Marg,
New Delhi110001.
....................... Complainant
Vs.
1.M/s God Father Travels & Tour P. Ltd.
5A, First Floor, Bhawani Market, Atta, Sector27, Noida201301.
2. Anil Kapoor Director M/s God Father Travels & Tour P. Ltd.
E11, DESU Colony, Tripolia Shakti Nagar, Delhi
3. Mrs. Neelam Kapoor, Chairman M/s God Father Travels & Tour P. Ltd.
E11, DESU Colony, Tripolia Shakti Nagar, Delhi ...................................Accused M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 1 of 36 Case Number. : 3070/1 & 3071/1 Date of Institution of Present Case. : 22.02.2002 Offence Complained Of. : U/s 138 NI Act Plea of the Accused. : Not Guilty Arguments Heard On. : 30.04.2015 Final Order. : Acquitted.
Date of Judgment. : 14.05.2015
− :: JUDGMENT ::
1. Vide this common judgment, I shall dispose of the present two complaints bearing CC No.3070/1 & 3071/1 filed by the complainant 'M/s On Time Travels Pvt. Ltd.' against 'M/s God Father Travels & Tours Pvt. Ltd. & Ors.', u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as "N.I Act").
2. In brief, the conjoint facts of the case are that the complainant company is carrying on the business of Air Tickets (International and Domestic). It has been alleged in the complaints that the accused persons approached the complainant company M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 2 of 36 during the period November, 2001 for purchase of air tickets for their customers. The accused persons purchased air tickets during the month of November & December, 2001 and, issued the cheques (shown in TableA hereunder) against the delivery of air tickets. However, when these cheques were presented for encashment, the same were returned back unpaid for the reasons mentioned against it as shown in TableA hereunder.
TABLE 'A'
IN CC NO.3070/1
Sl. CHEQUE NO./ DATE / AMOUNT RETURN MEMO DATE RETURN
No. EXHIBIT /REASON OF RETURN MEMO
EXHIBIT
1 172887 / 15.12.2001 4,96,634/ 10.01.2002 & 11.01.2002 Ex. CW 1/C
Ex. CW 1/B Funds Insufficient &
Insufficient Funds
IN CC NO.3071/1
Sl. CHEQUE NO./ DATE / AMOUNT RETURN MEMO DATE RETURN
No. EXHIBIT /REASON OF RETURN MEMO
EXHIBIT
1 172886 / 13.12.2001 5,00,000/ 02.01.2002 Ex. CW 1/C1
Ex. CW 1/B1 Funds Insufficient
2 172893 / 24.12.2001 2,96,055/ 26.12.2001 Ex. CW 1/C2
Ex. CW 1/B2 Funds Insufficient
3 172895 / 25.12.2001 3,00,000/ 27.12.2001 Ex. CW 1/C3
Ex. CW 1/B3 Drawer Stopped Payment
4 172896 / 28.12.2001 3,52,149/ 29.12.2001 Ex. CW 1/C4
Ex. CW 1/B4 Drawer Stopped Payment
5 172897 / 29.12.2001 5,00,000/ 31.12.2001 Ex. CW 1/C5
Ex. CW 1/B5 Drawer Stopped Payment
6 172898 / 31.12.2001 5,00,000/ 02.01.2002 Ex. CW 1/C6
Ex. CW 1/B6 Drawer Stopped Payment
M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 3 of 36
3. Thereafter, the complainant company got issued one legal demand notice calling upon the accused persons to make the payment within 15 days of receipt of the notice. It has been alleged that the notice sent to the accused company was duly served whereas notice sent at the residential addresses of the accused persons was refused by the accused persons. It has been very specifically averred that the said cheques were issued against the payment of legally recoverable debt by accused no.1 and accused no.2 & 3 are Director and Chairman of accused no.1. Accused no.2 & 3 are incharge and responsible for day to day affairs of the accused no.1 company and accused no.2 is also signatory of the cheques in question.
4. It has been alleged in the complaints that when the accused persons failed to make payment within 15 days of receipt of the legal demand notice, the complainant was constrained to file the present complaints u/s 138 N.I. Act.
5. The documents on which the complainant is relying upon are as follows : "cheques in question and their returning memos which have been shown exhibited in foregoing Table A; legal demand notice Ex. CW 1/D; postal receipts and UPC Ex. CW 1/E & Ex. CW 1/F; A/D Card Ex. CW 1/G1; Board Resolution passed in M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 4 of 36 favour of Sh. S.N. Gupta Ex. CW 1/A and record of one criminal case filed against the accused upon an FIR No.79/02, which is Ex. CW 1/X1".
6. It is pertinent to mention here that initially the complaint was filed by the complainant company through its AR Sh. Chander Goyal. However, subsequently the AR was substituted and the cases were pursued by Sh. S.N. Gupta. Sh. S.N. Gupta had filed his examinationinchief by way of affidavit wherein the averments made in the complaints have been reiterated on oath and fully supported the case of the complainant.
7. Finding a prima facie case against the accused persons, they were summoned. Notice u/s 251 Cr. P.C in CC No.3070/1 was served upon the accused persons on 07.04.2004 wherein they had pleaded not guilty and claimed trial. It is pertinent to mention here that during the trial, record of one complaint i.e. CC No.3071/1 was misplaced and the file was reconstructed. Reconstruction of the file was completed on 05.05.2014. Since Notice u/s 251 Cr. P.C could not be traced out in this complaint, fresh Notice u/s 251 Cr. P.C was served upon the accused persons on 05.05.2014 and Ld. Counsel for both the parties had made the statement regarding their no objection to the same. The defence already recorded was M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 5 of 36 also read in both the complaints. The AR of the complainant was crossexamined at length by Ld. Counsel for the accused. After his examination CE was closed. Statement of accused persons u/s 313 Cr. P.C was recorded on 06.06.2014 and the accused persons were called upon to lead DE. In their defence the accused persons have examined three witnesses. After their examination DE was closed. Thereafter arguments were heard and the case was fixed for orders.
8. The defence raised by the accused persons at the time of recording of Statement u/s 313 Cr. P.C was as follows:
Accused no.2 has taken a defence that the cheques in question were never issued in discharge of any legally recoverable debt or liability and those were without any consideration. The complainant had taken blank cheques as security from him before starting business. The complainant had assured that the said cheques would not be presented for encashment without his consent. He has further taken a defence that he had paid a sum of Rs.3,50,280/ vide cheque no.172882, dated 07.12.2001 and Rs.3,23,409/, vide cheque no.172875, dated 29.11.2001. Both the cheques were duly encashed and after that there was no liability upon the accused persons to make any payment. On 15.12.2001 no business transaction took place between the accused persons and M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 6 of 36 the complainant and the complainant has misused the cheques in question by filling the blank particulars and by presenting the same for encashment.
Accused no.3's defence was that she was just a housewife and has never transacted any business in any capacity on behalf of accused no.1. She has further taken a defence that she was never incharge and responsible for the affairs of accused no.1. Moreover she has not signed the cheques in question. She has never met, seen, conversed or communicated with the complainant or its Directors at any point of time. She has further taken a defence that she was a sleeping Director and never took part in the business activities of accused no.1. She has also stated that since there was no case against her, she was discharged in FIR No.79/02, filed by the complainant against the accused persons.
9. I have perused the defence taken by the accused persons and have also heard the arguments advanced by both the parties.
10. Ld. Counsel for the accused persons has raised the following issues: i. The present complaints have not been field as per law, as a complaint u/s 138 N.I. Act must be filed by the Payee whereas, the M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 7 of 36 present complaints have not been filed by the Payee. The complainant has not furnished proper authority letter in favour of the authorized representative as the AR has not been properly authorized to file the present complaints u/s 138 N.I. Act and also to depose on behalf of the complainant. Since the very institution of the complaints is bad in law, the same are liable to be dismissed. Moreover the Board Resolution filed on record is not proper as the same has not been signed by three Directors. Board Resolution dated 01.01.2002 is not proper as it is not an extract of the Board Resolution. Since it is the resolution in itself, the same has to be signed by three Directors.
ii. To discharge the onus for rebutting the presumptions raised against him the accused has to merely show preponderance of probability and once this onus is discharged, the onus shifts back upon the complainant to prove the guilt of the accused beyond all reasonable doubt. In his crossexamination the AR has admitted that he used to take cheques as security and it in itself is sufficient to rebut the presumptions raised against the accused persons. The complainant has failed to produce any document showing the transaction in respect of which the cheques in question were issued. The vouchers/bills filed by the complainant nowhere mentions the name of the accused. There was no transaction between the parties after 08.12.2001 and then how could the cheques be issued after M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 8 of 36 08.12.2001. The AR had sought time to produce the documents but he never produced the same, which further strengthens the case of the accused. The cheques in question were issued as security cheques only and not in discharge of any legally recoverable debt or liability.
iii. From the record itself it is clear that no legal demand notice has been served upon accused no.1 and accused no.3. Accused no.1 being company is primarily liable for an offence u/s 138 N.I. Act and it is incumbent upon the complainant to serve notice upon the company and if no notice is served upon the company, the other Directors can not be held liable, as service of notice is one of the essential ingredients for an offence u/s 138 N.I. Act. He has also argued that notice was sent from a post office which was 1 k.m. away from the office of the complainant whereas the stamp is of Model Town on the postal receipts, which further puts a doubt on the service of the notice to the accused persons. In fact in his cross examination itself the complainant has admitted that no notice has been issued to accused no.3, which in itself is sufficient to dismiss the complaints qua accused no.3.
iv. Ld. Counsel for the accused has raised a technical issue that evidence recorded during pre summoning stage can not be looked M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 9 of 36 into at post summoning stage for the purpose of passing final orders. This argument is based on Section 254 Cr. P.C which clearly provides that evidence led at pre summoning stage can not be looked into at post summoning stage. Moreover, the Board Resolution has not been proved at the post summoning stage, therefore, the same can not be relied upon. He has further argued that the Seizure Memo Ex. PW 2/DA, which is the record of a criminal case filed against the accused persons, contradicts the case of the complainant. That documents were recovered from the accused by the IO in that case. The said seizure memo in itself shows that only photocopies were recovered by the IO. Since the documents i.e. delivery vouchers and bills have not been produced in original by the complainant company, the same can not be said to have been proved as per the provisions of Indiance Evidence Act and hence, the same can not be relied upon. The complainant has miserably failed to produce any rival evidence to bring home the guilt of the accused beyond all reasonable doubt and hence, the accused persons are entitled to be acquitted.
11. Ld. Counsel for the accused has relied upon the following case laws M/s Vijay Polymers Pvt. Ltd. Vs. M/s Vinnay Aggarwal Crl. M.C. 1682/2008; M/s Indus Airways Pvt. Ltd. & Ors. Vs. M/s Magnum Aviation Pvt. Ltd. & Ors. Crl. Appl.
M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 10 of 36 No.830 of 2014; Vijay Vs. Laxman & Anr Crl. Appl. No. 261 of 2013; Sunil Mehta & Anr. Vs. State of Gujarat & Anr Crl. Appl. No. 327 of 2013; M/s Collage Culture & Ors. Vs. Apparel Export Promotion Council & Anr. Crl. M.C. No.3011/2004; M/s Balaji Seafoods Exports Vs. Mac Industries Ltd. 1999(1) CTC 6 and Exports India & Anr. Vs. State & Anr 2 (2007) BC 69.
12. Ld. Counsel for the complainant has argued that the guilt of the accused persons has been proved beyond all reasonable doubt as there is sufficient material on record to show that the accused persons have purchased the tickets from the complainant and against purchase of those tickets only, the cheques in question were issued. It has very categorically been mentioned in the complaints as well as in the affidavit that the accused persons i.e. accused no.2 & 3 are the Directors of accused no.1 and the onus was upon the accused to show that they were not the Directors. Merely because the cheques in question have been issued as security cheques, will not take out the cheques in question from the ambit of a complaint filed u/s 138 N.I. Act. All the security cheques are not out of the purview of Section 138 N.I. Act. Section 20 of N.I. Act clearly provides that where a blank signed cheque is issued by the drawer of the cheque, the payee of the cheque has the authority to complete the details in the cheque and present the same thereafter M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 11 of 36 for encashment.
13. Ld. Counsel for the complainant has further argued that it is now well settled that notice to the company amounts notice to its Directors and there is no need to send separate legal notice to each of the Directors. Therefore, this argument of Ld. Counsel for the accused is not sustainable in the eyes of law. The accused persons have raised inconsistent defence all throughout the trial and if the cheques were issued merely for the purpose of security and no transaction took place after 08.12.2001, then why no notice was issued by the accused to the complainant for return of the cheques in question.
14. Regarding defective Board Resolution Ld. Counsel for the complainant has argued that the Board Resolution was subsequently placed on record which has cured the defect and it is now well settled that the acts of agent can be ratified by the principal and there is no bar on filing of the Board Resolution after the filing of the complaint. He has further argued that the bills equivalent to the cheques' amount have already been placed on record and minor infirmities in the crossexamination of the complainant witnesses are immaterial as the crossexamination was conducted on many dates and it took years to complete the cross M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 12 of 36 examination of the complainant witnesses.
15. Ld. Counsel for the complainant has further argued that the very fact the cheques in question are not in serial number would show that the same could not have been issued for the purpose of security purposes because had it been issued for security purposes, the same would have been issued in one series, which is not the case at present. Therefore, Ld. Counsel for the complainant has argued that the accused persons have failed to rebut the presumptions raised against them whereas the complainant has been able to bring home the guilt of the accused persons beyond all reasonable doubt and thus they are liable to be convicted.
16. I have heard Ld. Counsel for complainant as well as Ld. Counsel for accused and have also gone through the case file.
17. Bare perusal of Section 138 of the NI Act clarifies that five essential ingredients for completing the offence under Section 138 of the Act are as below:
i) Issuance of the cheque in discharge of a legally recoverable debt or liability;
ii) Presentation of the cheque with the bank;
M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 13 of 36
iii)Returning of the cheque unpaid by the drawee bank;
iv) Giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, and
v)failure of the drawer to make payment within 15 days of the receipt of the notice.
18. It is pertinent to mention here that there are two presumptions of law as mandated by the Negotiable Instruments Act. According to Section 118 (a) of the Act, it shall be presumed that every negotiable instrument was made or drawn for consideration. By virtue of this clause, the Court is obliged to presume that the promissory note was made for consideration or until the contrary is proved. In Mallavarapu Kasivisweswara Rao Vs. Thadikonda Ramulu Firm and Others AIR 2008 SC 2898 it was held as under: "... ... ... The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its nonexistence M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 14 of 36 was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist...."
19. According to Section 139 of NI Act "it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque for discharge in whole or in part, of any debt or other liability." Under Section 139 NI Act there is a legal presumption that the cheque was issued for discharging a liability and that presumption can be rebutted only by the person who drew the cheque. This presumption can be rebutted by the accused by adducing evidence. So the burden of proof is on the accused.
20. In Hiten P. Dalal Vs. Bratindranath Banerjee AIR 2010 SC 1898 it was held as under: "The words 'unless the contrary is proved' which occur in this provision (Section 139) 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 exists. Unless, therefore, the explanation M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 15 of 36 is supported by proof, the presumption created by the provision cannot be said to be rebutted......".
21. Ld. Counsel for the accused has crossexamined the complainant witness i.e. CW 1 S.N. Gupta at length. During his crossexamination on 04.02.2006, CW 1 deposed that the resolution was passed prior to the institution of the present complaints. He further deposed that the resolution was passed before the issuance of the notice to the accused persons. To a specific suggestion, he admitted that whenever a resolution was passed by their company, it was signed by the number of the directors as per the coram mentioned in the Memorandum and Article of the company. He further deposed that as per the coram, a resolution passed by their company must be signed by three of the directors. He admitted that Shailendra Gupta has never been the Chairman of the company. He admitted that there was no copy of the notice sent by him to accused Neelam Kapoor. He further admitted that in the complaints no role whatsoever has been assigned to accused Neelam Kapoor. He admitted that accused Neelam Kapoor had never ever met or dealt with him or the complainant company in any manner whatsoever till date.
22. On 25.02.2006 CW 1 further deposed that the post office from where the notice was dispatched to the accused by his peon M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 16 of 36 was situated at a distance of about 1 k.m. from his office. He deposed that his office was at Rohit House, Connaught Place. He further stated that he did not know from where the notice was dispatched but the same was mentioned in the postal receipts. He admitted that Ex. CW 1/D2 is the certified copy of the explanation given by the IO of FIR No.79/02 pursuant to the order dated 29.04.2003. He further deposed that the present complaints were signed by him and not thumb marked. He further stated that the complaint was signed by one Chander Goyal, Ex. Employee of complainant company. However, he did not remember if in the notice Ex. CW 1/D1 he had mentioned that accused no.2 and 3 were incharge and responsible for the day to day affairs of accused no.1 company.
23. CW 1 further deposed that as and when new customers would come to him, particularly a company registered under the Companies Act, it was required to give him the Memorandum and Articles of Association of the company concerned. He admitted that since he has not seen the memorandum and article of accused no.1 company, he did not know who were the Directors of accused no.1. He did not know Mahender Vig or A.S. Sethi. He further deposed that he did not ask accused to furnish any security before entering into business transaction despite the fact that the accused was a stranger to him.
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24. On 29.08.2006, CW 1 deposed that he used to take cheques from accused as security. He did not remember the numbers of the cheques which had been taken as security. The transaction of business between him and the accused was always by means of documents and never done orally. He further deposed that he did not have trust on the accused. He further deposed that he did not know whose signature appears on the cheques which are the subject matter of the present complaints. He further deposed that he did not know in whose hands the cheques were scribed. He further deposed that he had different departments in his office. He further deposed that his son was the over all incharge of all the departments of the complainant company.
25. On 16.12.2006, CW 1 was again recalled for further cross examination. He was shown the judicial file containing AD Cards and after going through the same he admitted that AD cards are not part of the record and showed his ignorance about their existence He did not remember as to on 13.12.2001 worth rupees how much tickets were sold by the complainant to the accused company. Same reply was given by the witness for the dated 24.12.2001, 25.12.2001, 28.12.2001, 29.12.2001 & 31.12.2001. He did not remember as to when the complainant company had sold the last tickets to the accused company.
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26. On 23.04.2007 CW1 further deposed that he was in possession of delivery vouchers dated 31.12.2001, 29.12.2001, 28.12.2001, 25.12.2001 & 24.12.2001 with respect to the delivery of the tickets made by the complainant company to the accused company. He further deposed that the carbon copies were computer generated carbon copies. He further deposed that since he was not feeling well, he was not in a position to cull out the photocopies of the documents mentioned above from the record which he has brought. He further deposed that he has handed over the copies of the aforesaid delivery vouchers to the police. He further deposed that he must have been given the carbon copy of the seizure memo regarding the seizure of the above mentioned documents by the police during investigation. He further deposed that he was in possession of the carbon copy of the seizure memo. He had sought time to locate the same and bring it on NDOH.
27. On 22.04.2009 CW 1 further deposed that he could not produce the delivery vouchers dated 24.12.2001, 25.12.2001, 28.12.2001, 29.12.2001 & 31.12.2001. He denied the suggestion that he had made a false statement that no delivery vouchers were traceable. He further denied the suggestion that no delivery vouchers mentioned above ever existed or that was the reason that he could not produce the same. He denied the suggestion that Notice Ex. CW 1/D, dated 08.01.2002 was never sent to the M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 19 of 36 accused persons. He also denied the suggestion that the cheques in question were without consideration and were never issued in discharge of any debt or liability, in part or as a whole. He denied the suggestion that the blank cheques were taken before transacting business in the name of the accused no.1 company. He further denied the suggestion that subsequently the aforesaid cheques were filled up by him or any other officer of the complainant company with dishonest intention to coerce the accused persons to allow the complainant company to continue to use/conduct business with the accused company.
28. CW 1 admitted that the accused company had paid him some amount of money by cheques which were duly encashed. He stated that it might be one or two cheques. However, he did not remember as to what was the amount covered by these cheques. He deposed that the complainant company had been maintaining its accounts including the accounts relating to transaction of business with the accused company. He further deposed that he was in possession of the aforesaid statement of accounts. He deposed that he had filed the statement of accounts alongwith the complaint relating to transaction of business with the accused company M/s God Father Pvt. Ltd. The witness was shown the judicial file and after going through the same, he stated that he had not filed the same and the same is not on record. He deposed that he had never M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 20 of 36 received any amount in cash from the accused persons. He admitted that accused Anil Kapoor had paid him a sum of Rs.5,00,000/ in cash. He did not recollect as to when the payment by means of cheques (encashed) was made by the accused company to the complainant company.
29. On 03.11.2010 CW1 was recalled for further cross examination pursuant to filing of application u/s 311 Cr. P.C. He deposed that he did not remember Mrs. Neelam Kapoor as a person involved in the commission of offence in connection with the police complaint dated 02.01.2002. He deposed that before filing the present complaint, he had not issued any court notice u/s 138 of N.I. Act to Mrs. Neelam Kapoor.
30. Ld. Counsel for the accused persons has further tried to rebut the presumptions by leading DE. In defence the accused has examined three witnesses namely Sh. Rakesh Kumar, Clerk of Indian Bank as DW 1, Sh. K.K. Kapoor as DW 2 and Sh. Navjyot Khanna, Manager (operations), ABN Amro Bank (previously know as "Royal Bank of Scotland")
31. On 31.07.2014 DW 2 Sh. K.K. Kapoor has deposed that he knew Sh. S.N. Gupta, Director of On Time Travels Pvt. Ltd. He has deposed that he alongwith his brother i.e. accused Anil Kapoor M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 21 of 36 had gone to the office of Sh. S.N. Gupta to discuss about the starting of the business with the complainant. He further deposed that Sh. S.N. Gupta stated that he would not transact any business until and unless gurantee is offered. He further deposed that Sh. S.N. Gupta told that he required guarantee in liquid cash i.e. in the shape of blank cheques. He further deposed that Sh. S.N. Gupta had told him that he used to take blank cheques as security from the other companies as well. He further deposed that at the time when the blank cheques were handed over, no business had been transacted between the complainant and the accused and as such no liability existed upon the accused persons towards the complainant in any manner. He further deposed that during the discussion, Sh. S.N. Gupta had made it clear that as and when a ticket is sold and delivered, a document/delivery challan would be prepared regarding the delivery of the ticket and authorized representative of accused no.1 company would have to sign the document as acknowledgment for the same. The witness further deposed that Sh. S.N. Gupta had further stated that the ticket would be delivered only against the payment for the ticket amount mentioned on the tickets and the cheque would be taken there and then only. He further deposed that a few transactions took place between the complainant and accused company and the payment was made against those transactions by the complainant company.
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32. On 21.08.2014 DW 2 further deposed that he had seen the cheques in question and deposed that the it was photocopies however the original of these cheques in blank were handed over as security cheques to Sh. S.N. Gupta by accused Anil Kapoor in November, 2001, before starting of transaction of any business with the complainant company. He further deposed that after a few transactions, the business was abruptly stopped by Sh. S.N. Gupta and therefore he alongwith his brother had made a visit to Sh. S.N. Gupta for knowing the reasons behind stopping business transactions. He further deposed that Sh. S.N. Gupta told them that he wanted to carry on the business in the name of accused no.1 and accused no.2 would get his appropriate share of profits from the said business. He further deposed that accused Anil Kapoor did not agree to the proposal of Sh. S.N. Gupta and refused to allow him to conduct any business in the name of accused no.1. He further deposed that since accused Anil Kapoor had refused to conduct any business in the name of accused no.1 company, no further business transaction took place. He further deposed that on 26.12.2001 they had again visited to Sh. S.N. Gupta to take back the cheques but he told them that he had lost and misplaced the blank cheques which were given to him as security.
33. On 01.10.2014, a question was put by Ld. Counsel for the complainant to the DW 2 that why he alongwith his brother had M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 23 of 36 visited the office of the complainant when no payment was outstanding and payable to the accused? To this question the witness stated that the complainant had abruptly stopped the business and they had gone there to inquire as to why he had stopped the business.
34. On 16.10.2014 DW 2 had denied the suggestion that the amount and date in the cheques in question were duly filled by the accused or that the name of the payee in the cheques was filled by his hands.
35. So far as issuance of cheques is concerned, the same has not been disputed by the accused persons. Presentment of the same and return of the same unpaid have also not been disputed. Now it is to be seen whether the accused persons have been able to rebut the presumptions raised against them and if yes whether the complainant has been able to bring home the guilt of the accused persons beyond all reasonable doubt or not. It is well settled that the onus upon the accused to rebut the presumptions raised against him is merely preponderance of probability whereas onus upon the complainant is to bring home the guilt of the accused beyond all reasonable doubt.
36. Now first defence of the accused persons is that the present M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 24 of 36 complaints have not been properly filed as per provisions of law as a complaint u/s 138 N.I. Act can be filed only by Payee or Holder in due course. Whereas the present complaints have been filed by M/s On Time Travels Pvt. Ltd through Sh. Chander Goyal who is neither the Payee nor Holder in due course. Moreover the AR has failed to furnish proper authority letter and Board Resolution vide which Chander Goyal has been authorized to file the present complaints and Sh. S.N. Gupta has been authorized to depose on behalf of the complainant.
37. So far as this defence is concerned, the same is not sustainable in the eyes of law. It is well settled that a complaint can be filed by a company through its authorized representative. I have gone through the authority letter/board resolution filed by the complainant in favour of Sh. Chander Goyal which is Ex. CW 1/A. After going through the same this court is convinced that the AR Sh. Chander Goyal has been duly authorized by the complainant to file and pursue with the present complaints filed u/s 138 N.I. Act against the accused company. There is no defect in the said authority letter. The same has been signed by the Chairman of the complainant company and merely because the same has not been signed by three directors which constitutes the coram will not altogether nullify the authority granted to the AR Sh. Chander Goyal. I have also gone through the Board Resolution vide which M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 25 of 36 Sh. S.N. Gupta has been authorized by the complainant company in the present case. Similarly after Sh. S.N. Gupta Sh. Shailendra Gupta was appointed as new AR of the complainant vide Board Resolution dated 23.12.2010 and the same also authorizes Sh. Shailendra Gupta to file complaint, to give evidence and do all necessary things to pursue the complaints filed by the complainant company.
38. In M.M.T.C Ltd. Vs. M/s Medchal Chemicals & Pharma P. Ltd. 2001 IX AD (SC) 457 the Hon'ble Supreme Court has held that the only criteria under Section 142 N.I. Act is that the complaint must be filed by the payee or the holder in due course and this criteria is satisfied if the complaint is filed in the name and on behalf of the company. Though the official who had filed the complaint initially had no authority, still the company can at any stage rectify that defect by sending of a competent person to represent the company but the complaints filed on behalf of the company can not be quashed on the ground that duly authorized person did not file it.
39. Therefore, after going through all the authority letters and Board Resolutions, this court is of the view that the authority letters substantially comply with the provisions and authorizes the prospective AR to file and pursue with the present complaints filed M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 26 of 36 u/s 138 N.I. Act against the accused persons. Hence, this defence of the accused is not sustainable and is overruled.
40. Second defence raised by the accused's counsel was that as per Section 254 Cr. P.C evidence recorded during pre summoning stage can not be looked into at post summoning stage and once the accused has been summoned and served with Notice u/s 251 Cr. P.C, fresh evidence is to be tendered and the evidence tendered before summoning of the accused can not be relied upon.
41. This contention of Ld. Counsel for the accused is also not sustainable as in the present case although evidence was tendered at pre summoning stage yet at the post summoning stage also Notice u/s 251 Cr. P.C was served upon the accused and the affidavit of Sh. S.N. Gupta was tendered afresh on 04.02.2006. The witness Sh. S.N. Gupta was duly examined in chief and had tendered his affidavit Ex. CW 1/X, which duly complies with Section 254 Cr. P.C. Moreover all the documents such as cheques, return memos, legal demand notice, postal receipts and A.D Cards were exhibited at post summoning stage as well. Therefore, this defence raised by Ld. Counsel for the accused holds no ground so far as the present complaints are concerned.
42. Now coming to the third defence raised by the accused M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 27 of 36 persons. The third defence of the accused is that the legal demand notice has not been served upon accused no.1 & 3. Ld. Counsel for the accused has very vehemently argued that service of legal demand notice is sine qua non for an offence u/s 138 N.I. Act and cause of action arises only if the drawer of the cheque fails to make the payment after expiry of 15 days of service of legal demand notice. If no notice has been served upon the accused persons, no cause of action arises and, therefore, no offence u/s 138 N.I. Act can be said to have been committed. Ld. Counsel for the accused has argued that there is nothing on record to show that notice has been issued to accused no.1 & 3 and, therefore, accused no.1 & 3 are entitled to be acquitted on this ground alone. Since accused no.1 is a company and the cheques in question have been issued from the account of accused no.1, accused no.1 is primarily liable for prosecution u/s 138 r/w Section 141 N.I. Act and accused no.2 & 3 are merely secondary liable for the said offence. Since no notice has been served upon accused no.1 & 3, no offence can be said to have been committed by any of the accused persons. Hence, all the accused are liable to be acquitted on this ground.
43. I have gone through the entire record and there is nothing on record to show that legal demand notice has been sent to accused no.1 & 3. The legal demand notice itself shows that it has been addressed to accused Anil Kapoor only who is the Director of M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 28 of 36 accused no.1. The A.D. Card and postal receipt also shows that legal demand notice has been sent only to accused no.2 and not to accused no.1 & 3. To counter this argument Ld. Counsel for the complainant has argued that although accused no.1 is a company and accused no.2 & 3 are its Directors, yet there was no need to send separate notice to all the accused persons as accused no. 2 is the husband of accused no.3. Moreover it is well settled that notice to company amounts to notice to its Directors and merely because notice has not been issued to accused no.1 & 3 inadvertently, will not exonerate them from their liability and from prosecution u/s 138 N.I. Act.
44. So far as liability of accused no.1 & 3 are concerned, this court find force in the contention of Ld. Counsel for the accused that since no notice has been issued to accused no.1 & 3, an essential ingredient of sending legal demand notice to the accused persons for an offence u/s 138 N.I. Act is missing and thus accused no.1 & 3 are entitled to be acquitted. There are catena of judgments which show that notice to the company will amount notice to the Directors who are incharge and responsible for its day to day affairs. However, I have not come across any case law which would show that notice to the Director would amount notice to the company as well.
M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 29 of 36
45. In Ranjit Tiwari Vs. Narender Nayyar 2012 VIII AD (Delhi) 546 it has been observed that notice to the company amounts notice to all the Directors who are incharge and responsible for day to day affairs of the company. But merely because notice to the company would mean notice to its Directors can not be stretched to such an extent that notice to the Directors individually would mean notice to the company as well. Service of notice is an essential ingredient for an offence u/s 138 N.I. Act and if the accused is able to show that no notice has been sent to him, he can seek acquittal for an offence u/s 138 N.I. Act. Therefore, this defence raised by Ld. Counsel would go in favour of accused persons and since notice has not been served upon accused no.1 & 3, they are entitled to be acquitted for an offence u/s 138 N.I. Act. In fact in his crossexamination, AR of complainant Sh. S.N. Gupta had clearly admitted that no notice was sent to accused no.3.
46. Now coming to the fourth defence raised by Ld. Counsel for the accused that the cheques in question were not issued in discharge of any legally recoverable debt or liability. It is the case of the accused persons that there were dealings between the accused and the complainant for purchase of air tickets and when the business was started the accused no.1 company had issued advance cheques to the complainant only to gain confidence of the M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 30 of 36 complainant and not to make any payment as such. The cheques in question were issued as security cheques only and not for discharge of any legally recoverable debt or liability. Since the cheques in question were issued as security cheques, the same will not fall within the purview of Section 138 N.I. Act.
47. Ld. Counsel for the accused has further argued that in his crossexamination the AR of the complainant had admitted that they used to take advance cheques from the parties, which further strengthens the case of the accused. He has further argued that despite availing several opportunities the complainant failed to bring any document on record to show that the tickets were sold to the accused persons and failure of the complainant to produce any such document would attract an adverse inference to the extent that had the same been produced by the complainant, the same would have weakened the case of the complainant and that is why those documents have not been deliberately produced by the complainant.
48. Ld. Counsel for the accused has further argued that onus upon the accused was only to raise a plausible defence and to show that whatever he has said is probable and once the accused has been able to raise such a defence, presumptions raised against him stand rebutted and the onus shifts back upon the complainant to M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 31 of 36 bring home the guilt of the accused beyond all reasonable doubt. The accused persons have been able to rebut the presumptions raised against them by crossexamining the complainant witness and also by bringing positive evidence on record and failure of the complainant to bring any cogent documentary evidence on record would mean that the complainant has failed to discharge its onus of brining home the guilt of the accused beyond all reasonable doubt.
49. After hearing the arguments of both the parties and after going through the entire record specially the crossexamination of the complainant witness, this court is of the view that the accused persons have been able to rebut the presumptions raised against them. In the crossexamination of the complainant witness the accused persons have been able to raise sufficient doubt in the case of the complainant as to whether the tickets were actually sold by the complainant or not. There are material contradictions in the evidence of the complainant as on several occasions he had stated that he was in possession of delivery vouchers dated 31.12.2001, 29.12.2001, 28.12.2001, 25.12.2001 & 24.12.2001. However, despite availing several opportunities the complainant failed to bring any such document on record. In fact on one occasion the complainant had submitted that he had brought the documents in the court but when asked to show those documents he showed his ignorance and stated that he could not able to find out the record as M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 32 of 36 he was not feeling well. This further puts a doubt upon the case of the complainant as to whether he had the relevant documents or not with him.
50. Not only that he was not able to furnish the documents but also during crossexamination he was not able to clearly tell as to whether on the said dates there were actual business transactions between them or not. Time and again the witness was asked to furnish any document to show that the tickets were delivered to accused persons. But again and again he failed to produce any document which further weakens the case of the complainant. So far as the statement of accounts furnished by the complainant is concerned, the same can not be relied upon as the same has not been furnished in original nor the same has been proved as per Indian Evidence Act.
51. In Bharat Barrel & Drum Manufacturing Company v Amin Chand Payrelal (1999) 3 SCC 35 it was laid down as under:
"..The defendant can prove the nonexistence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 33 of 36 disentitle him to the grant of relief on the basis of the negotiable instrument."
52. In Krishna Janardhan Bhat Vs. Dattatraya V. Hegde 2008 Crl.L.J. 1172, the Hon'ble Supreme Court has held that for proving the defence, accused is not required to step into the witness box and need not to examine himself. He may discharge his burden on the basis of the material already brought on records as he has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. Court also held that prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is 'preponderance of probabilities'. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relied. It was also held that where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration. Supreme Court also cautioned that the courts must be on guard to see that merely on the application of presumption as contemplated under Section 139 of N.I. Act, the same may not lead to injustice or mistaken conviction.
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53. In Kamala S. Vs. Vidyadharan M.J. 2007 III AD (SC) 184, the Hon'ble Supreme Court again held that standard of proof in discharge of the burden in terms of section 139 of the Act being of preponderance of probabilities, the inference therefore can be drawn not only from the material brought on record but also from the reference to the circumstances upon which the accused relied upon. Categorically stating that the burden of proof on accused is not so high as that of the prosecution.
54. Again in Kumar Exports Vs. Sharma Carpets 2009 II AD (SC) 117, the Hon'ble Supreme Court held that accused in a trial under section 138 of the Act has two options to rebut the presumptions. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However the court need not insist in every case that the accused should disprove the non existence of M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 35 of 36 consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated.
FINAL ORDER
55. In the end it can be said that the accused persons have been able to rebut the presumptions raised against them whereas the complainant has failed to bring home the guilt of the accused beyond all reasonable doubt. Accordingly, all accused persons are acquitted of offence u/s 138 N.I. Act.
56. Now to come up for compliance of Section 437A Cr. P.C today itself at 3:45 p.m. Announced in the open Court on 14th May, 2015 (PUNEET PAHWA) MM (NI ACT1) PATIALA HOUSE COURTS NEW DELHI M/s On Time Travels Pvt. Ltd. Vs. M/s God Father Travels & Tour P. Ltd. & Ors. Page No. 36 of 36