Delhi District Court
14. In Rangappa vs . Mohan, Air 2010 Sc 1898, It Was Observed ... on 10 January, 2013
IN THE COURT OF CIVIL JUDGEI/ METROPOLITAN MAGISTRATE, NEW DELHI
DISTRICT, NEW DELHI
Presided By : Sh. Apoorv Sarvaria, DJS
C.C. No: 461/11
Unique Case ID No. 02403R1073242008
Spicejet Ltd.
Having its registered office at
Near Steel Gate Bus Stop, TerminalI
Indira Gandhi International Airport
New Delhi110037.
Throught its Authorised Representative
Sh. Sanjay Sharma
.....Complainant
Versus
Sh. Monal Sachdeva
H.No. 4, Nyaypuri, Karnal,
Haryana132001
.....Accused
COMPLAINT UNDER SECTION 138 OF THE NEGOTIABLE
INSTRUMENTS ACT, 1881
DATE OF INSTITUTION : 01.12.2008
DATE OF ARGUMENTS :18.12.2012
DATE OF DECISION :10.01.2013
JUDGMENT
Brief Facts
1. The facts giving rise to the present complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") are that the complainant Spicejet Limited is a company incorporated under the Companies Act, 1956 having its registered office near Steel Gate Terminal Bus Stop, Indira Gandhi International Airport, New Delhi37 and is stated to be engaged in the business of air travelling.
Spicejet Ltd. v. Monal Sachdeva Page 1 of 13
2. It is further stated in the complaint that the accused Shri Monal Sachdeva was appointed by the complainant company at the post of Senior Cabin Attendant, In Flight Services Department on various terms and conditions annexed with the letter of appointment dated 22nd March 2005. It is further stated that the complainant company had proposed the name of the accused for training as an Understudy to In Flight Safety Instructor and all the expenses incurred in the said training were borne by the complainant. It is further stated that the accused had executed an indemnity bond cum service undertaking dated 16th January 2006 in this regard in favour of the complainant company. As per the terms and conditions of the indemnity bond cum service undertaking, it was agreed that the accused had to work with the complainant for a minimum period of two years in such functions as may be assigned to him from time to time. It is further stated in the complaint that the accused had deposited cheque bearing no.728305 dated 7 th October 2008 of Rs. 2 lakhs as security to cover up the tangible and intangible costs of training in the event of accused leaving employment with the complainant before completing the minimum period of two years.
3. It is further stated in the complaint that the accused violated the terms and conditions of the appointment and resigned from the complainant company on 5th December 2007. Therefore, the accused became liable to reimburse the training costs incurred by the complainant upon the accused.
4. The complainant presented the cheque bearing number 728305 dated 7th October 2008 of Rs. 2 lakhs drawn on ICICI Bank Ltd, New Delhi with its bank. However, the said cheque was returned unpaid with the remarks "insufficient funds" vide cheque return memo dated 7th October 2008. The complainant again presented the said cheque which was again returned unpaid with the same remark vide return memo dated 15th October 2008. The complainant issued a legal notice dated 21st October Spicejet Ltd. v. Monal Sachdeva Page 2 of 13 2008 to the accused by way of registered AD. However, the accused did not make the payment of the cheque amount within 15 days of the service of the legal notice. Hence, it is stated in the complaint that the accused has committed the offence under Section 138 of the NI Act.
Proceedings before Court
5. The present complaint was received by way of assignment on 2nd December 2008.
The learned Predecessor took cognizance and summoned the accused who entered appearance. On 3rd November 2009, notice of accusation was framed against the accused who pleaded not guilty and claimed trial. He also stated in his defence that the cheque in question was issued as a security and was got issued from him by the complainant as a condition for continuance of his services with them alongwith signing of indemnity bond dated 16th January 2006.
6. During trial, the complainant produced Shri Sanjay Sharma, Manager (Legal) of the complainant company as CW1 who tendered his evidence by way of affidavit Ex. PW1/A and relied on documents Ex. CW1/1 to Ex. CW 1/7. Ex. CW1/2 and Ex. CW 1/3 being photocopies were deexhibited and marked as Mark A and Mark B. Thereafter, CW1 Shri Sanjay Sharma was crossexamined. Thereafter, the complainant closed its evidence.
7. During examination conducted under Section 313 r/w Section 281 of Cr.P.C., the accused stated that it is correct that he had issued the cheque no. 728305 for a sum of Rs. 2 lakhs to the complainant but the cheque was undated when it was issued. He also stated that he did not receive any legal notice. He stated that the complainant has filed a false case with a view to pressurise him to join their services. He also stated that no expenses were incurred by the complainant on his training.
Spicejet Ltd. v. Monal Sachdeva Page 3 of 13
8. In his defence, the accused produced Shri Rajinder Prasad, Senior Air Worthiness Officer, DGCA as DW1 who produced the letter dated 5th September 2006 written by the Controller of Airworthiness Ex. DW1/A in which it was written that whenever any cabin crew training instructor leaves the airline his/her approval as instructor becomes null and void and he/she cannot act as DGCA approved instructor. Thereafter, DW1 Shri Rajinder Prasad was crossexamined.
9. The accused also produced himself as DW2 and tendered his evidence by way of affidavit Ex. DW2/1. The accused in his examinationinchief also relied on documents ُEx. DW2/A to Ex. DW2/B. Thereafter, the accused was crossexamined as DW2.
10. The accused also produced Shri Suresh Kumar Vishwakarma, Ahlmad in the court of Shri Dinesh Kumar, Learned Civil Judge2, New Delhi who produced the relevant documents from the record of Civil Suit No. 12/12 pending in the Court of Learned Civil Judge02, New Delhi District Ex. DW 3/1 to Ex. DW 3/2. Thereafter, DW3 was discharged after which the the defence evidence was closed. Arguments of Advocates
11. Shri Kapil Sankhla, learned Advocate for the complainant submitted that the presumption under Section 139 of the NI act is raised and the onus is on the accused to rebut the said presumption. He submitted that the complainant incurred huge loss when the accused resigned from the complaint company and the accused is liable to pay the amount of the cheque to the complainant. He relied on the decisions in Fertiliser and Chemical Travancore Ltd v. Ajay Kumar 1990 LLR 711, Mahanagar Telephone Nigam Ltd. v. Haryana Telecom Ltd. OMP number 299/2003, decided by Delhi High Court and ONGC v. Saw Pipes (2003) 5 SCC 705 in support of the submission. He also submitted that there was no violation of doctrine of restraint of trade under Section 27 of the Contract Act, as Spicejet Ltd. v. Monal Sachdeva Page 4 of 13 alleged by the accused by getting the indemnity bond cum service undertaking executed from him. He relied upon the decisions in IEC School of Art and Fashion v. Gursharan Goyal & Ors. 1998 PTR 41 (Delhi), Niranjan Shankar Golikari v. Century Spinning and Manufacturing Company AIR 1967 SC 1098 and Nazir Maricar v. Marshalls Sons and Amp Company, A.S.No. 606 of 1990 (Madras High Court). He also submitted that the accused was not pressurised by the complainant company to resign from the complainant company by making him sign on the second indemnity bond. He relied upon the decisions in BCCL v. Presiding Officer Central Government 2003 IIr 618 (Jharkhand) HC and G.C. Day v. Management of Eureka Forbes Limited 2009 (112) DRJ 1 in support of the submission that the burden is on the employee to show that he was pressurised to resign from the employer company. As regards the submission on behalf of the accused that the cheque was issued in an undated condition, he referred to the decision of Bhaskaran Chandrasekharan v. Radhakrishnan 1998 Cr.L.J 3228 (Kerela), Kamruddin Ali v. Citi Financial Crl. Rev. Petition No. 280/2012, decided by the High Court of Delhi and Venkatesh Dutt v. MS Shoes East Ltd. 2004 (109) DLT 610. Learned Advocate for the complainant also relied upon the decisions in Niranjan Shankar Golikari v. Century Spinning and Manufacturing Company Ltd. AIR 1967 SC 1098, Ashok Kumar v. Gulshan Kumar 2009 (8) AD (Delhi) 35 and Kamruddin Ali v. Citi Financial 2012 (3) JCC 192 (NI).
12. On the other hand, Shri Sudhir Nagar, learned Advocate for the accused submitted that the complainant never incurred costs/expenses to the tune of Rs. 2 lakhs for the purpose of training the accused. He relied upon the decision in Siddappa v. K. Nanjappa 2010 (2) DCR 138 (Karnataka), M/s. Sicpa India Ltd. v. Sh. Manas Pratim Deb, RFA No. 596/2002 decided on 17th November 2011 (Delhi). He also submitted that the cheque issued was only in the form of security and since the Spicejet Ltd. v. Monal Sachdeva Page 5 of 13 complainant has failed to produce any document showing the expenses incurred to the tune of Rs. 2 lakhs, the accused is not liable for the commission of the offence under Section 138 of the NI Act. He relied upon the decision in M.S. Narayana Menon @ Mani v. State of Kerela & Anr. AIR 2006 SC 3366. He also submitted that even if the accused owed some money to the complainant company on account of leaving the complainant before two years, however, since the accused had been in the services of the complainant company for 23 months, he cannot be expected to be liable to pay the whole amount of Rs. 2 lakhs. He submitted that as the cheque amount in the present complaint is more than the liability, if any, of the accused to the complainant, the offence under Section 138 of the NI act is not made out. In support of this submission, he relied upon the decision in RB Ramakrishnan v. A Meena (2012) 2 MLJ 324. He also relied upon the decision in State of Kerala v. United Shippers and Dredgers Ltd. AIR 1982 Kerela 281, Union of India v. Rampur Distillery and Chemical Co., Ltd AIR 1973 SC 1098 and Fateh Chand v. Bulkishan Das AIR 1963 SC 1405.
Findings
13. This court has heard the submissions of learned Advocate for the complainant as well as the accused and perused the record. The signatures on the cheque no. 728305 Ex.CW1/4 is not disputed by the accused. Since the execution of the cheque is not disputed, the presumption under Section 139 of the NI Act is raised.
14. In Rangappa Vs. Mohan, AIR 2010 SC 1898, it was observed by the Hon'ble Supreme Court as under :
"14. In light of these extracts, we are in agreement with the respondentclaimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable Spicejet Ltd. v. Monal Sachdeva Page 6 of 13 debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, Spicejet Ltd. v. Monal Sachdeva Page 7 of 13 the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. " (emphasis added)
15. Therefore, the presumption under Section 139 of the NI Act is raised is relating to the legally enforceable debt or liability of the accused. However, the same can be rebutted by the accused by raising a probable defence for which he can rely on the materials submitted by the complainant and it is conceivable that in some cases the accused may not need to adduce evidence of his own.
16. In the present case, the accused has raised certain defences. The first defence of the accused is that the present cheque Ex. CW1/4 was issued by way of security. The complainant does not dispute the said fact that the accused issued the said cheque only as security as the complainant's witness CW1 Shri Sanjay Sharma has also deposed in his evidence affidavit Ex. CW1/A that the accused had deposited the cheque no. 728305 Ex. DW1/4 as a security to cover up the tangible and other intangible costs of the training in the event of accused leaving employment with the complainant before completing minimum period of two years.
17. Further defence of the accused is that no expenses to the tune of Rs. 2 lakhs were incurred by the complainant for training the accused. It is noted that the indemnity bond cum service undertaking dated 16th January 2006 Mark B (the document has been produced by the complainant itself) clearly stipulates that the accused had deposited the cheque as a security to cover the "direct and other indirect costs of the training/losses/damages" in the event of him leaving the employment with Spicejet Ltd. v. Monal Sachdeva Page 8 of 13 Spicejet i.e. the complainant before completing the minimum period of two years from the date of successful completion of his training as In Flight Safety Instructor. Hence, the purpose of the security cheque issued by the accused was to cover the direct and other indirect costs of the training/losses/damages incurred by the complainant in case the accused leaves before two years from the date of successful completion of his training.
18. The CW1 Shri Sanjay Sharma has, during his crossexamination stated that the training of the accused was held at the training department of the complainant's office in Gurgaon. He also stated that the accused usually used to report daily for training. However, he further submitted in his crossexamination that he had not filed any document pertaining to the expenses incurred by the complainant company on the above said training of the accused.
19. He also submitted in his crossexamination that the complainant company wanted to get another bond executed by the accused in the year 2007 for subsequent trainings undertaken by the accused. However, the accused did not sign the subsequent Bond and service undertaking for the subsequent trainings. He also stated that he has not filed any document to show that the accused had agreed for any deduction in his salary of equal instalments for over a period of three years. He also stated that Rs. 2 lakhs had been quantified as the expenses incurred for the training for which the accused had undertaken.
20. On the issue of the quantum of expenses incurred by the complainant company in the training of the accused, the accused has himself deposed as DW2 in his examinationinchief that he was told by the officials of the complainant company that signing the bond and handing over the cheque was essential if he wanted to continue with the job with the complainant company. He has further deposed in his examinationinchief by way of affidavit that he had attended the classes being held Spicejet Ltd. v. Monal Sachdeva Page 9 of 13 at the corporate office of the complainant company at Gurgaon. He also deposed that the method of teaching was classroom study only where a In Flight Safety Instructor took classes comprising of about 20-25 students. He further deposed that the classes lasted for about 30 days and there used to be one to two hours of classes on these days. He also deposed that pursuant to these classes, he appeared in the DGCA examination and passed the same and DGCA certificate in this regard was issued to him. However, the same could not be used by him to gain employment elsewhere as it lapses the moment he leaves the concerned airline. He also deposed that the training undertook by him did not involve any expenditure at all and even if some expenditure was incurred, it was much less than Rs. 2 lakhs. He also deposed that no expenses were incurred in letting someone observe the class being taken by In Flight Safety Instructor. He also stated that the complainant company illegally withheld his salary for three months from September to November 2007 which was released only after a lot of requests and pursuations. He also deposed that certain deductions were made in his salary for the month of October and November 2007 to the tune of Rs. 12,111/ and Rs. 11,111 respectively. He also deposed that he had served the complainant company for a period of about 23 months out of the stipulated period of 24 months. Even in his crossexamination, the DW2 Shri Monal Sachdeva (accused) has stated that he participated in the understudy In Flight Safety Instructor training as he was made to sit in classes. He specifically stated that he was not sent anywhere except to attend classes and the classes took place for 30 days.
21. Analysing the above said evidence, this court is of the considered view that the accused has probablised his defence that the complainant did not incur the expenses to the tune of Rs. 2 lakhs for his training as an understudy to the In Flight Safety Instructor. The complainant has not produced any document to show the Spicejet Ltd. v. Monal Sachdeva Page 10 of 13 expenses incurred by the complainant company to the tune of Rs. 2 lakhs. No bill has been shown to prove that the accused was sent anywhere except for taking classes in a classroom for 30 days at Gurgaon. However, the complainant witness CW1 Shri Sanjay Sharma has admitted in his crossexamination that the accused took classes in Gurgaon for the purpose of the said training and admitted that no document was produced to show the expenses incurred by the complainant company. On the other hand, the accused has testified as DW2 that no expenses to the tune of Rs. 2 lakhs was incurred by the complainant on his training. In that view of the matter, this court is of the considered view that the accused has probablised his defence and rebutted the presumption raised under Section 139 of the NI Act as he has proved that the expenses incurred by the complainant company on his training were much less than Rs. 2 lakhs.
22. As the accused has rebutted the said presumption, the onus is now on the complainant to prove beyond reasonable doubt that the complainant incurred more than Rs. 2 lakhs as direct or indirect expenses on the training of the accused which is the purpose for which the cheque Ex. CW1/4 was issued. However, no documentary evidence has been shown by the complainant to prove the direct and other indirect costs of the training/losses/damages to the tune of Rs. 2 lakhs. Thus, the complainant has not been able to prove that the cheque Ex. CW1/4 was issued in discharge of the liability of Rs. 2 lakhs owed by the accused to the complainant. The decisions relied upon by the complainant in Mahanagar Telephone Nigam Ltd. v. Haryana Telecom Ltd. and ONGC v. Saw Pipes, are not applicable to the facts of the present case since the nature of the contract between the employer and employee does not appear to be a genuine preestimate of the training costs/damages/losses to be incurred by the complainant in the present case where the accused has served 23 months out of the stipulated terms of two years. Also, Spicejet Ltd. v. Monal Sachdeva Page 11 of 13 once the accused has rebutted the presumption raised under Section 139 of the NI Act, it is for the complainant to prove beyond reasonable doubt that the said cheque was issued by the accused in discharge of legally recoverable debt or liability. (See Pine Product Industries v. RP Gupta 2007(94) DRJ 352, para 11).
23. Moreover, the accused has also produced emails Ex.DW2/A where he has pleaded for release of his salary for the previous two months vide email dated 4 th October 2007 to the complainant. The complainant witness has also admitted in his cross examination that the complainant wanted to get another bond executed by the accused in the year 2007 and the accused did not sign the subsequent Bond. The accused, as DW2, has also deposed in his examinationinchief that his salary was withheld and the amount from the salary was deducted because he had refused to sign the subsequent bond. All these circumstances show that the accused was forced to leave the complainant company.
24. Even otherwise, as the complainant has failed to prove that the expenses incurred by the complainant company being direct/indirect expenses due to the accused leaving his employment were amounting to Rs. 2 lakhs, this court is of the considered view that the cheque Ex. CW1/4 was not issued in discharge of any legally recoverable debt or liability owed by the accused to the complainant company.
25. There is no need to consider other arguments raised by the parties on the ground that the indemnity bond cum service undertaking Ex. CW1/3 was in violation of Section 27 of the Contract Act. Even if it is taken that the said contract was not in violation of Section 27 of the Contract Act, the complainant has failed to prove the expenses (direct or indirect) incurred by the complainant for the training of the accused or losses or damages to the tune of the cheque amount. Thus, the complainant has failed to prove its case and the accused has discharged his burden Spicejet Ltd. v. Monal Sachdeva Page 12 of 13 by raising a probable defence in the present complaint.
26. The complaint is dismissed. The accused is acquitted. Bail bonds stand cancelled.
Surety is discharged. Endorsement, if any, on the documents furnished be cancelled. File be consigned to the Record Room. Judgement be uploaded to www.delhidistrictcourts.nic.in.
Announced in the Open Court (Apoorv Sarvaria)
on 10 January, 2013
th
Civil JudgeI/MM, New Delhi District
New Delhi
Spicejet Ltd. v. Monal Sachdeva Page 13 of 13