Delhi District Court
Air Works India Engineering Private ... vs Shekhar Kumar Sinha on 28 November, 2023
IN THE COURT OF SH. HARJOT SINGH
M.M.- 01, (N. I. ACT), DIGITAL COURT, PATIALA HOUSE COURT,
NEW DELHI.
JUDGMENT
CC No. 9934-2022 M/s Air Works India (Engineering) Private Limited Through its Authorised Representative Regd. office at Mumbai International Airport Near Kalina Military Camp Gate No. 8, Santacruz (East), Mumbai-400029.
Corporate Office at:-
Kalyani House, Plot 40, Sector-18, Gurugram 122001, Haryana.
........................................................ Complainant Versus Mr. Shekhar Kumar Sinha, No. E/4, Saurav Nagar, Rajvaidh Colony, Nayapura Kolar Road, Bhopal Madhya Pradesh-462042.
Also At:
Vaibhav Apartments, T-2, HIG, Sarvadharma Colony, A-26, CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.1 of 18 SH. Digitally signed by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:05:26 +0530 Kolar Road, Bhopal, Madhya Pradesh-462042.
........................................................Accused
a) Unique/new case number : DLND02-098234-2022
b) Name of complainant : M/S Air Works India (Engineering) Private Limited
c) Name of accused person(s) : Mr. Shekhar Kumar Sinha
d) Offence complained of : Under Section 138 of N. I. Act,1881
e) Plea of accused person(s) : Pleaded not guilty
f) Final order : Acquittal
g) Date of such order : 28.11.2023 BRIEF STATEMENT OF THE REASONS FOR THE DECISION (As mandated u/s 355(i) of the Code of Criminal Procedure, 1973.) Case of the complainant
1. The present Judgment is a result of culmination of trial initiated on the complaint filed by the complainant. It is stated that the complainant is engaged, inter-alia, in the business of providing maintenance, repair and overhaul services to various airlines and other customers for their aircraft. The complainant issued a letter of Appointment dated January 23, 2020, appointing the accused as Aircraft Maintenance Engineer -A&C in the AMRO Division on the terms and conditions mentioned in the said Letter of Appointment. It is stated that in terms of the Letter of Appointment, the complainant was within its right to instruct the accused to undergo specialized training/skill and knowledge CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.2 of 18 Digitally signed by SH. SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:05:33 +0530 enhancement/developmental program, which would mutually benefit the complainant and the accused. It is submitted that the accused had successfully undergone the training program, namely, B-787-8/9/10 with Genx & RR Trent 1000 B1/B2, online theoretical and practical type Training course and exams.
("B-787 training"). It is further stated that on successful completion of above- mentioned training, the accused ought to have presented the invoices for reimbursement, which the accused failed and neglected to do. It is further stated that as a part of the on boarding exercise for above mentioned training and in mutual interest, the accused voluntarily executed an Indemnity bond cum Service undertaking on 09.12.2020 ("Indemnity Bond"). The Indemnity bond which is 'Mark C' is stated to be an integral part of the said letter of Appointment. Further, it is stated that as per the said Indemnity Bond, the accused agreed that on completion of the respective training, the accused committed to work for a minimum period of 3 years from the date of endorsement of the accused's license or a period of 5 years from the start of training, whichever is earlier. It is stated that the accused arbitrarily left the employment of the complainant before completing the minimum period of service and without serving the notice period of 3 months. It is further stated that the complainant suffered losses due to breach of material terms and conditions of the Indemnity Bond. It is further stated that the complainant invoked the Indemnity Bond and presented the cheque in question for compensating the losses suffered by the complainant company. The cheque bearing no. 028129, for an amount of Rs. 30,00,000/- drawn on Axis Bank is the cheque in question and the same is Ex. CW 1/5.
2. The Complainant presented the cheque in question to its banker for encashment but the same was returned unpaid with the endorsement "funds insufficient" vide return memo dated 20.07.2022. The return memo is Ex. CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.3 of 18 SH. Digitally signed by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:05:38 +0530 CW1/6.
3. The complainant demanded the above said amount from the accused but he did not make the payment. Thereafter, complainant sent a legal notice dated 11.08.2022, Ex. CW 1/7, through speed post. Postal receipts is Ex. CW1/10 and tracking report is Mark D. The accused failed to make the payment of the cheque amount to the complainant within the stipulated period. Hence, the present complaint case was filed.
4. Pre-summoning evidence was recorded and proceedings were initiated against accused Shekhar Kumar Sinha. On summoning, accused entered his appearance and it was ensured that copy of complaint has been supplied. Thereafter, accused was admitted to bail and notice under section 251 CrPC was put to the accused on 31.03.2023.
The Defence
5. Plea of defence was recorded on 31.03.2023. Wherein accused stated that "I do not owe any liability qua the cheque in question towards the complainant. The complainant was my previous employer and the cheque in question was taken from me forcibly as an indemnity guarantee for some course taken by me that is an air bus type course". Thereafter, matter was fixed for complainant evidence and accused side was granted opportunity to cross-examine the complainant's evidence.
COMPLAINANT'S EVIDENCE
6. During the trial, complainant has led the oral and documentary evidence against the accused to prove its case beyond reasonable doubt. The following CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.4 of 18 SH. Digitally signed by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:05:43 +0530 evidence are as under:
Oral Evidence CW1 Sh. Thiagarajan Documentary Evidence Mark A Copy of board resolution.
Mark B Copy of letter of appointment.
Mark C Copy of indemnity bond/promissory note.
Ex.CW 1/5 Original cheque bearing no. 028129. Ex.CW 1/6 Returning memo dated 20.07.2022. Ex.CW 1/7 Copy of legal demand notice dated 11.08.2022.
Mark D Copy of tracking report.
Ex.CW 1/9 True copy of reply received of the legal demand notice. Ex.CW1/10 Copy of post receipts.
Complainant stepped in witness box through its AR as CW1, who adopted his affidavit of pre-summoning as his evidence reiterating almost all facts of complaint, stating all exhibits available on record.
7. Complainant evidence was closed vide order dated 12.05.2023 and thereafter, matter was fixed for recording statement of accused. STATEMENT OF ACCUSED
8. The statement of accused was recorded under Section 313 of The Code of CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.5 of 18 Digitally signed by SH. SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:05:49 +0530 Criminal Procedure, 1973 read with Section 281 of The Code of Criminal Procedure, 1973 on 04.08.2023. Incriminating evidence was put to him. Accused denied all the allegations. In recording of statement of accused, accused opted to lead defence evidence and examine himself as defence witness by moving an application u/s 315 of Cr.P.C.
9. Thereafter, defence evidence was closed vide order dated 11.08.2023.
10. Final arguments were addressed by the complainant and accused. Case file perused.
INGREDIENTS OF OFFENCE AND DISCUSSION-
11. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfill all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence:-
First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability; Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.6 of 18 Digitally signed by SH. SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:05:54 +0530 bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice. APPRECIATION OF EVIDENCE- .
12. The accused can only be held guilty of the offence under Section 138 NI Act, if the above-mentioned ingredients are proved by the complainant co- extensively. Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled.
Notably, there is no dispute qua the proof of first, third, fourth and fifth ingredient. The complainant had proved the original cheque vide Ex. CW1/5, which the accused has not disputed as being drawn on the account of the accused. The signatures on the cheque in question are not disputed. It was not disputed that the cheque in question was presented within its validity period. The cheque in question was returned unpaid vide return memo dated 20.07.2022, Ex. CW 1/6 with the remark "funds insufficient". The accused has admitted the receipt of the legal demand notice dated 11.08.2022, Ex. CW 1/7 in the notice framed u/s 251 of Cr.P.C on 31.03.2023 and in his statement recorded under Section 313 r/w Section 281 of Cr.P.C on 04.08.2023. It was admitted that the CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.7 of 18 SH. Digitally signed by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:06:01 +0530 accused has received the legal demand notice and the same has been replied by him.
13. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debt or liability. In the present case, the accused has contended that he has handed over the cheque in question under undue influence and coercion and the cheque in question was never handed over to the complainant in discharge of any legally enforceable debt or liability. It is well settled law that mere denial by the accused would not rebut the statutory presumptions u/s 138 and u/s 118 of NI Act which arises in favour of the complainant under NI act and presumption will still arise in favour of complainant.
14. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
The combined effect of these two provisions is a presumption that the cheque CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.8 of 18 Digitally signed SH. by SH. HARJOT SINGH HARJOT Date:
SINGH 2023.11.28 17:06:06 +0530 was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarize the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.9 of 18 SH. Digitally signed by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:06:11 +0530 presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. 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 they rely. 25.4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
The presumptions raised under Section 118(b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability. In this case, the defence raised by the Ld. counsel for the accused to rebut the presumption is discussed below:
Defence that the cheque in question was not issued for any legal debt or liability
15. In a nutshell, the case of the accused is that he underwent some training while in employment with the complainant company and that training is done by CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.10 of 18 Digitally signed SH. by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:06:16 +0530 him out of his own will and expenses. He further contends that the training undertook by him was not done at the instance of the complainant company and was done after the working hours. It is further the case of the accused that when after three to four months of completion of training, he informed the complainant about the training, he was forced to sign the indemnity bond and promissory note under the coercion that he will be fired from service on failure to execute the indemnity bond. He further contends that in order to save his job, he signed the indemnity bond and promissory note and issued the cheque in question as security and not in discharge of any legally enforceable debt or liability. He further contends that he is not liable to pay the amount mentioned in the indemnity bond as no losses either tangible or intangible were incurred by the complainant company on breach of the terms of indemnity bond and the appointment letter.
16. Per contra, the case of the complainant is that the accused has voluntarily executed the indemnity bond and promissory note and he is liable to pay the bond amount of Rs. 30 lakhs for breach of terms and conditions of the indemnity bond. It is further the case of the complainant that the complainant company had suffered intangible losses due to breach of terms of indemnity bond and the accused should compensate the company for the same. Such intangible losses as claimed by the complainant are towards:
CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.11 of 18 Digitally signed by SH. SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:06:21 +0530 A) Payment towards salary in absence of accused due to training. B) Loss of time and business loss.
C) Loss towards finding replacement and other intangible expenses.
17. In the present case, it is not disputed that the accused was the employee of the complainant company and was appointed vide appointment letter 'Mark B'. It is also not disputed that the indemnity bond 'Mark C' was executed between the parties. The accused has admitted his signatures on the indemnity bond and the promissory note. It is also not disputed that the bond was executed after the accused undertook the training. Therefore, the only question left to be decided here is that whether the indemnity bond is a valid and enforceable agreement and whether the accused has breached the terms of appointment letter and the indemnity bond.
In order to understand the factual matrix behind the contentions raised by the parties, it is pertinent to refer to the terms of the appointment letter 'Mark B' with respect to training. Para 12 of the appointment letter 'Mark B' talks about the training. It reads as follows: -
18. "During the course of your employment/appointment with the company you may be required to undergo specialized training/skill and/or knowledge CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.12 of 18 SH. Digitally signed by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:06:27 +0530 enhancement/developmental program to enable you to effectively discharge your current or new responsibility assigned to you. In such cases, the company may propose that an agreement, in such form and manner acceptable to the company be entered into between you and the company. Such agreement shall primarily intend to offset the expenses incurred by the company towards your specialized training/skill and/or knowledge enhancement. In the event that such an agreement is executed between you and the company you shall be governed by the terms and conditions of such agreement as well, which shall be considered as an integral parcel of this appointment letter".
19. Therefore, as per the terms of the appointment letter, the employee is required to enter into an agreement cum bond when: -
1) The employee during the course of employment/appointment is required to undergo specialized training/skill or knowledge enhancement program.
2) In such cases, where an employee is required to undergo some specialized training, the bond cum agreement is executed to offset the expenses incurred by the company towards the training.
20. The words "required to undergo" and "in such cases" are of utmost importance here. It is not the case of the complainant that the training i.e. B-787 was provided to the accused (employee) by the complainant company. Further, it CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.13 of 18 SH. Digitally signed by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:06:33 +0530 is even not the case of the complainant that the accused was required to undergo the said training at the behest/instance of the complainant company. Further, it is not disputed that the expenses of the training were also borne by the accused only. The AR of the complainant company has stated in his cross-examination that the expenses and complete cost of the training were borne by the accused only.
21. Therefore, when the accused was neither required to undergo training at the behest of the complainant company and nor the expenses of the training were borne by the complainant company, the question of executing an indemnity bond to offset the expenses of the training does not arise. Therefore, it can be safely concluded that the indemnity bond 'Mark C' executed between the parties was not executed as per the terms of the appointment letter 'Mark B'.
22. Further, the terms of the indemnity bond are in violation of Article 19 (1)
(g) of the Indian Constitution and Section 27 of the Indian Contract Act, 1872. This observation is based on the fact that when the training to the employee is not provided by the employer and the expenses of the training undertook by the employee were also not borne by the employer, then the restrictions by way of negative covenants imposed on the employee vide the indemnity bond 'Mark C' are restrictions, in restraint of trade and profession as per Section 27 of the Indian Contract Act. The employer in such a case cannot bind the employee to CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.14 of 18 Digitally signed SH. by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:06:39 +0530 work exclusively for the employer for 3 or more years by executing such an indemnity bond. Such an agreement is a void agreement in eyes of law. Even otherwise also, the terms of the indemnity bond are unreasonable and are against public policy. As per the terms of the indemnity bond, at one side, it is mentioned that the accused (employee) has already attended the specialized training and the practical's and on the other side it is mentioning the terms of the training and is contemplating the losses which may be suffered by the complainant company in future due to the said training. It is very hard to believe that the complainant by way of indemnity bond is fixing the terms of the training and is contemplating the loss due to the training which was already attended by the accused. Further, no document or evidence showing incurring of any loss by the complainant company as alleged by the company is placed on record.
23. It is also pertinent to mention here that the indemnity bond executed in the present case is providing protection to the complainant company against "retrospective losses". At the time of execution of indemnity bond, the accused had already attended the training. Such an indemnity bond is not a valid indemnity bond as per Section 124 of Indian Contract Act,1872. Further, since the accused at the time of execution of bond has already attended the training, the bond is also not supported by any consideration and is void per-se.
CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.15 of 18
Digitally signed by
SH. SH. HARJOT
HARJOT SINGH
Date: 2023.11.28
SINGH 17:06:44 +0530
24. In "NIRANJAN SHANKAR GOLIKARI VS. THE CENTURY SPINNING AND MANUFACTURING COMPANY 1967 AIR 1098", the Hon'ble Supreme Court held that "negative covenants operative during the period of the contract of employment, when the employee is bound to serve his employer exclusively are generally not regarded as restraint of trade and therefore do not fall under Section 27 of Indian Contract Act, unless the contract is unconscionable or excessively harsh or unreasonable or one-sided".
25. In Niranjan (supra), the employer provided the training to the employee in the manufacture of tire cord yarn and the employee after completing the training, joined the rival concern without completing the period of 5 years with the employer. However, in the present case, no training was provided to the accused at the behest of complainant company and no expenses of the training were borne by the complainant. Here, the bond to work exclusively for three years with the complainant after completion of training appears one-sided, unconscionable and without consideration. Therefore, such an agreement cum indemnity bond is hit by the provisions of Article 19 (1) (g) and Section 27 and Section 25 of Indian Contract Act. Therefore, such an agreement cum bond is void.
26. Therefore, since explanation to Section 138 read with Section 139 of NI Act clearly stipulated that the debt or liability means legally enforceable debt or CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.16 of 18 Digitally signed SH. by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:06:49 +0530 other liability, the claim by the complainant company based on a void agreement is unenforceable claim under Section 138 of NI Act.
27. In view of the aforesaid discussion, this court is of the considered opinion that the indemnity bond 'Mark C' executed between the parties is firstly not executed as per the terms of appointment letter and secondly the same is a void agreement. The accused therefore, cannot be said to have breached the terms of indemnity bond. Further, the court is also of the opinion that the cheque in question was not issued for any legally enforceable debt or liability as the same is based on an agreement/bond which is not valid in eyes of law because such an agreement is against the public policy as per Section 23 of Indian Contract Act and the claim regarding the same cannot be enforced by any court of law. Thus, pithily put, the transaction in question is hit by the provisions of Section 23, Section 25 and Section 27 of Indian Contract Act along with Article 19 (1) (g) of the Indian Constitution.
28. The complainant has therefore failed to raise a legal claim against the accused on the legal grounds discussed above and the presumption under Section 139 NI Act along with Section 118 (b) of NI Act stands rebutted. Therefore, second ingredient to the offence u/s 138 NI Act stands not proved.
29. The complainant has failed to prove his case and the fact that cheque in CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.17 of 18 Digitally signed SH. by SH. HARJOT HARJOT SINGH Date: 2023.11.28 SINGH 17:06:55 +0530 question was issued by the accused in favour of the complainant for consideration or in discharge of legally enforceable debt or other liability. Accordingly, accused Shekhar Kumar Sinha is hereby acquitted of the offence u/s 138 NI Act.
Announced in the open Court
On 28.11.2023 SH. Digitally signed
by SH. HARJOT
HARJOT SINGH
Date: 2023.11.28
SINGH 17:06:59 +0530
(Harjot Singh)
M.M (N.I.Act),Digital Court-01
PHC/New Delhi 28.11.2023
CC No. 9934-2022 M/S AIR WORKS INDIA ENGINEERING PRIVATE LIMITED VS SHEKHAR KUMAR SINHA Page No.18 of 18