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[Cites 17, Cited by 0]

Delhi District Court

Savitri Devi vs . on 22 February, 2020

                      IN THE COURT OF MS. UDITA JAIN
                    METROPOLITAN MAGISTRATE­08 (NI Act)
                        DWARKA COURTS, NEW DELHI

Ct. Case No. : 9485/19

Smt. Savitri Devi
W/o Sh. Rajendra Singh
R/o D­1/84, Jeewan Park
Pankha Road
New Delhi­110059
                                                        .....................Complainant
                                             Versus

1. M/S Blossom Well Training Developments Pvt Ltd
O/o 217, 1st Floor, Pocket­B7
Sector­4, Rohini, New Delhi­110085

Through Its Directors:

2. Sh. Sahil Sahore
Director M/S Blossom Well Training Developments Pvt Ltd
O/o 217, 1st Floor, Pocket­B7
Sector­4, Rohini, New Delhi­110085
R/o H­No.149, Pocket­2, Sector­23
Rohini, New Delhi­110085

3. Sh. Zeesan Ali@ Saiyed Zeesan Ali
Director M/S Blossom Well Training Developments Pvt Ltd
O/o 217, 1st Floor, Pocket­B7
Sector­4, Rohini, New Delhi­110085
R/o Moh­Maqbara 1St, Sadat Manzil
Near Masjid Angoor Wali, PS: Mughalpura
Moradabad, Uttar Pradesh­ 244001
Also At: Peetal Nagri
Behind Police Chouki Makbara Thana Katghara
Moradabad, UP



CC no. 9485/19
Savitri Devi Vs.
M/S Blossom Well Training Developments Pvt Ltd & Ors.
                                                                                    1/27
 4. Smt. Deepali Sahore
Manager/Director M/S Blossom Well Training Developments Pvt Ltd
O/o 217, 1st Floor, Pocket­B7
Sector­4, Rohini, New Delhi­110085
Also At: Bal Bharti Public School,
Sector­9, Rohini
New Delhi­110085

5. Sh. Gagan Kalia
Manager, M/S Blossom Well Training Developments Pvt Ltd
O/o 217, 1st Floor, Pocket­B7
Sector­4, Rohini, New Delhi­110085
R/o H­No.116, Pocket­2, Sector­23
Rohini, New Delhi­110085


                                                               ........................Accused


Date of Institution                           :         03.04.2010
Plea of the accused                           :         Pleaded Not Guilty
Date of Reserving Judgment                    :         25.01.2020
Date of Judgment                              :         22.02.2020
Sentence or final Order                       :         Accused no.1 and 2 are
                                                        convicted.
                                                        Accused no. 4 and 5 are
                                                        acquitted.


                                         JUDGMENT

BRIEF FACTS AND REASONS FOR DECISION OF THE CASE

1. By way of the present judgment, I shall decide the complaint case U/S. 138 r/w S.141 of the Negotiable Instruments Act, 1881 (hereinafter CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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referred as the NI Act) filed by the complainant Savitri Devi against the accused persons. It is pertinent to mention here that while the present complainant was filed by Mrs. Savitri Devi on whose pre­ summoning evidence the accused were summoned, vide order dated 18.10.2018, the ld. predecessor of this court had taken on record the Special Power of attorney filed on behalf of complainant and allowed the SPA of the complainant, Mr. Rajendra Singh to lead his post­summoning evidence by way of affidavit. Furthermore, it also mentionable here that accused no. 3 Zeesan Ali was declared as an absconder by the ld. predecessor vide order dated 06.10.2012.

COMPLAINANT'S VERSION

2. The factual matrix, as per the complaint, necessary for the disposal of the present case, is that the accused company had launched a scheme called "Cash And Care And My Mart" in the month of January, 2009. It is alleged that the only purpose of the accused persons in introducing the said scheme was to commit fraud upon the public and to induce investments without any motive of returning the same. The husband of the complainant came in contact with one Amir Hassan and in turn to the directors of the company i.e. Mr. Sahil Sahore and Saiyed Zeesan Ali who explained him the nature of the scheme and its benefits. It was through her husband that the complainant came to know about the scheme of the accused. It is stated that the directors and managers assured the complainant of incentives and income on investment believing which the complainant invested a sum of Rs. 63,000/­ in accused company by way of cheque bearing no. 65861 for CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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Rs. 15,750/­, cheque bearing no. 065865 for Rs. 31,500/­ (both drawn on her husband's account) and by way of cash of Rs. 25,750/­ which was duly accepted and encashed by the accused persons. When despite persistent requests during the course of several months, the accused did not provide any incentives or profit on investments to the complainant, she asked the accused to refund the money invested by her. The accused for the said purpose allegedly issued the cheque in question bearing no. 258865 dated 30.11.2009 drawn on ICICI Bank Ltd., Rohini Branch, Plot no. 7, community centre, S.D. Tower, Sec.8, Rohini, New Delhi­110085 for a sum of Rs. 63,000/­ in favour of the complainant. It is averred that the accused persons assured the complainant that the above said cheque will be honoured in the month of January, 2010 and believing upon the assurances of the accused, the complainant received the cheque. The complainant deposited the said cheque with her banker for encashment after the assurances of the accused but the same was dishonoured with the reason "Account Closed" vide returning memo dated 16.01.2010 which was received by the complainant on 18.01.2010. Having no other option, complainant issued legal notice dated 15.02.2010 to the accused and the same was served upon the accused. However, despite notice the accused has failed to make the payment of cheque amount to the complainant within the statutory period of 15 days and accordingly the present case has been filed by the complainant for prosecution of the accused no.1 Company and its directors accused no. 2 to 5 for the offence under section 138 of the NI Act. It is urged that the accused no. 2 to 5 being the Directors and managers of the company, are in charge and responsible for the day to day affairs and are further having control over the day to day business of the company CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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(accused no.1) and are wholly responsible for any act done by the company (accused no. 1) as all of them marketed the scheme and collected investment for the accused no.1 company.

3. After complaint was filed, the complainant examined herself in pre­ summoning evidence and after hearing the Ld. Counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused by the Court vide order dated 26.09.2011. On appearance of the accused a separate notice U/S. 251 of the Criminal Procedure Code (herein after referred as "the Code") dated 05.01.2013 was given to the accused persons to which they pleaded not guilty and claimed trial. It is apposite to mention here that despite several attempts the matter could not be settled between the parties. Therefore, an opportunity was granted to the accused persons by the court for cross examination of the complainant's witnesses vide order dated 02.07.2015.

COMPLAINANT EVIDENCE

4. In post summoning evidence, Special Power of Attorney holder of the complainant, Mr. Rajendra Singh got himself examined as CW­1 & tendered his evidence by way of affidavit Ex. CW­1/A reiterating the contents of the complainant. The complainant also relied upon the documents Ex. CW1/1 to CW1/11 and document Ex. CW1/12:

1. Ex.CW1/1 and Ex. CW1/ 1A is copy of bank account passbook of complainant' husband .
CC no. 9485/19

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2. Ex.CW1/1B is the cheque deposit slip.

3. Ex.CW1/2 is the cheque in question.

4. Ex.CW1/3 is the returning memo.

5. Ex.CW1/4 is the legal notice.

6. Ex. CW1/5 are the postal receipts.

7. Ex. CW1/6 is the UPC receipt.

8. Ex. CW1/7 to Ex. CW1/11 are the returned envelopes.

9. Ex. CW1/12 i.e. the power of attorney.

5. CW­1, Rajendra Singh was then cross examined by Ld. Counsel for the accused. No other witness was examined by the complainant and complainant's evidence was closed vide order dated 12.07.2019.

STATEMENT OF ACCUSED U/S. 313 r/w S.281 OF THE CODE

6. The statement of accused no.1, accused no.2, accused no.4 and accused no.5 was recorded U/S. 313 r/w S.281 of the Code in which all the incriminating evidence along with exhibited documents were put to them. In his statement, accused no.2, Sahil Sahore, who is also the director of accused no.1, admitted his signatures over the cheque in question but denied receipt of legal notice or filling the particulars on the cheque. He submitted that accused no.3, Zeesan Ali (who was declared as an absconder by the court) was actually the main director of the company and he was appointed merely as a trainer by him. He averred that it was only for incentive that he was made one of the director of the company. He further alleged that since accused no.3 Zeesan Ali disappeared, they have been CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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wrongly victimised by people. He denied his liability towards the complainant with respect to the cheque in question and averred that the cheque in question was issued by him as he was threatened by the complainant along with 10­15 more persons. Further, accused no. 4, Deepali Sahore denied that she had signed over the cheque in question, filling up the particulars on the same as well as receipt of legal notice. She stated that she never issued the cheque in question in favour of the complainant since she resigned from the accused company in early 2009 itself. She also, denied her liability towards the complainant. Furthermore, accused no.5, Gagan Kalia also denied his signatures over the cheque in question, filling up the particulars on the same as well as receipt of legal notice. He refused any association with the accused company and thus, denied owing any liability towards the complainant.

DEFENCE EVIDENCE

7. In defence evidence, accused no.5 examined himself as a witness. He deposed that during the transaction between the complainant and the accused no. 1 company he was nowhere involved in the affairs of the company in any of its transactions. He averred that during that time he was already employed with Dialedge Infotech Pvt. Ltd. He further relied upon an offer letter Mark DW1/1 and one relieving letter Mark DW1/2 from Dialedge Infotech Pvt. Ltd. He stated that he was wrongly implicated in the present case as the accused no.2 Sahil Sahore was his uncle. He was then cross­examined by ld. counsel for complainant.

CC no. 9485/19

Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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8. No other defence witness was examined by the accused persons and therefore, D.E was closed on 14.01.2020 after which the matter was fixed for final arguments.

FINAL ARGUMENTS

9. Final arguments were addressed on behalf of both the parties. During arguments, Ld counsel for complainant alleged that the accused have been unsuccessful in rebutting the presumption against them and therefore, are liable to be convicted of the offence under Section 138 NI Act. On the other hand, written arguments have been filed by ld. counsel for accused wherein it is argued that from the cross examination of the complainant and his witnesses as well as from the by way of his own evidence, the accused have been successful in rebutting the presumption against him. It is further argued on behalf of accused that the witness of the complainant, CW­1 Rajendra Singh does not have proper authority to depose in behalf of the complainant as he has no knowledge of the facts of the present case. It is claimed that he was never even impleaded as an authorised representative of the complainant and thus has no authority to prosecute the present case. It is alleged that accused no.5 by way of his evidence has proved that he had no connection with accused no.1 company and was never its manager. It is further averred that in a criminal case the complainant has to prove his case beyond all reasonable doubts and since the complainant has failed to discharge the burden of proof upon him beyond all reasonable doubts, the accused is entitled to be acquitted. Ld. counsel for accused has also relied upon judgement titled as "A.C CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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Narayanan vs. State of Maharashtra" and "G.Kamlakar vs. Surna Securities".

LEGAL POSITION

10. I have heard Ld. Counsels for both the parties and have perused the entire record of the case file. Before proceeding further, the spectrum of Sec.138 NI Act and Sec.141 NI Act in the legal ambit needs to be noted :

Section 138 of the Negotiable Instruments Act provides that:
"Dishonour of cheque for insufficiency, etc, of funds in the account: Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in while or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless
(a) the cheque has been presented to the bank within a period of six CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.
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months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation:For the purposes of this section, "debt or other liability"

means a legally enforceable debt or other liability.

11. The eventualities to be fulfilled to attract the liability under Sec.138 NI Act have been analysed by the Hon'ble apex court in Kusum Ingots and Alloys Ltd. vs. Pennar Peterson Securities Ltd. (2000) 2 SCC 745 : 2000 SCC (Cri) 546 : AIR 2000 SC 954] wherein it has been held that the following ingredients are required to be satisfied for making out a case under Sec.138 NI Act :

"(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.
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of that account for the discharge of any debt or other liability;
(ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(iii) that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice."

12. Further, Section 141 of the Negotiable Instruments Act is reproduced as follows:

Offences by companies - (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly;
CC no. 9485/19
Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.
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Provided that nothing contained in this sub­section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:
Provided further that where a person is nominated as a Director of a Company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.
(2) Notwithstanding anything contained in sub­section (1), where any offence under this Act, has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly."

13. With respect to the deeming fiction raised by Sec. 141 of the Negotiable Instruments Act, the Hon'ble apex court while answering a reference in S.M.S. Pharmaceuticals Ltd Vs Neeta Bhalla And Anr (Appeal (Crl.) 664 Of 2002 decided on 20 September, 2005) has observed as follows:

" While analysing Sec.141 of the Act, it will be seen that it operates in cases CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.
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where an offence under Sec.138 is committed by a company. The key words which occur in the Section are "every person". These are general words and take every person connected with a company within their sweep. Therefore, these words have been rightly qualified by use of the words "who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence etc." What is required is that the persons who are sought to be made criminally liable under Sec.141 should be at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the provision. It is only those persons who were in charge of and responsible for conduct of business of the company at the time of commission of an offence, who will be liable for criminal action. It follows from this that if a director of a Company who was not in charge of and was not responsible for the conduct of the business of the company at the relevant time, will not be liable under the provision. The liability arises from being in charge of and responsible for conduct of business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. Conversely, a person not holding any office or designation in a Company may be liable if he satisfies the main requirement of being in charge of and responsible for conduct of business of a Company at the relevant time. Liability depends on the role one plays in the affairs of a Company and not on designation or status. If being a Director or Manager or Secretary was enough to cast criminal liability, the Section would have said so. Instead of "every person" the section would have said "every Director, Manager or Secretary in a CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.
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Company is liable"..etc. The legislature is aware that it is a case of criminal liability which means serious consequences so far as the person sought to be made liable is concerned. Therefore, only persons who can be said to be connected with the commission of a crime at the relevant time have been subjected to action. A reference to sub­section (2) of Sec.141 fortifies the above reasoning because sub­section (2) envisages direct involvement of any Director, Manager, Secretary or other officer of a company in commission of an offence. This section operates when in a trial it is proved that the offence has been committed with the consent or connivance or is attributable to neglect on the part of any of the holders of these offices in a company. In such a case, such persons are to be held liable. Provision has been made for Directors, Managers, Secretaries and other officers of a company to cover them in cases of their proved involvement.
The conclusion is inevitable that the liability arises on account of conduct , act or omission on the part of a person and not merely on account of holding an office or a position in a company. Therefore, in order to bring a case within Sec.141 of the Act the complaint must disclose the necessary facts which make a person liable."

APPRECIATION OF EVIDENCE IN LIGHT OF INGREDIENTS OF SECTION 138 NI ACT R/W SECTION 141 NI ACT AND THE DEFENCE RAISED BY ACCUSED

14. For the purpose of affixing liability upon accused no. 2,4 and 5 for the cheque drawn on the account of accused no.1 company under Sec.138 NI Act r/w Sec.141 NI Act, the ingredients of both these sections CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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are to be satisfied. The cheque in question bears the signatures of only one of the accused i.e. accused no.2, who has also not disputed his signatures on the same. Further, it is also not denied by the accused persons that the cheque in question is drawn on the account of accused no.1 company. The presentation, dishonour of the cheque in question and the cheque returning memo Ex. CW1/3 has also not been challenged by the accused. Therefore, in light of the evidence on record it stands duly proved that the cheque in question is drawn on the account maintained by accused no.1 company and the same also bears signatures of accused no.2. Furthermore, it also stands proved that the cheque in question CW1/1 got dishonoured vide cheque returning memo Ex. CW1/3 with the remarks "Account closed". As far as the liability of accused no.4 and 5 is concerned, since the cheque in question does not bear their signatures, it has to be seen whether the requirements of Sec.141 NI Act have been satisfied.

15. Coming to the issue whether the accused no. 2,4 and 5 have been served with the legal demand notice Ex. CW­1/4 by the complainant. The accused have denied the receipt of legal demand notice at the time of framing of the notice under section 251 of the Code as also in their statement U/S. 313 of the Code.

16. It is pertinent to mention here that throughout the trial, the accused have never challenged the addresses mentioned in the legal demand notice Ex. CW1/4 and Regd. AD receipts. The accused no.2 and 5 in fact have admitted in their statement under Sec. 313 of CrPC that the address mentioned in the legal demand notice is their correct address.

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Therefore, there remains no doubt that the legal demand notice Ex. CW1/4 has been sent by the complainant at the correct address of accused no. 2,4 and 4 through speed post. It is trite to say that when there is service of notice by post on the correct address of the accused which evidently has taken place in the present case the same would amount to proper service. Otherwise, a trickster cheque drawer would deny receiving the legal demand notice by adopting different strategies and escape from legal consequences of Section 138 of the NI Act. It was for the accused to rebut the presumption about the service of notice and show that they had no knowledge that the notice was brought to their address or that the address mentioned on the notice and the postal receipt is incorrect or that the letter was never tendered to them. There is always a presumption that the legal demand notice has been duly served upon the accused unless some concrete evidence in rebuttal is adduced by the accused to establish that the legal demand notice has not been served upon them which is totally absenting in the present case. Even otherwise, in C.C. Alavi Haji vs Palapetty Muhammed & Anr (2007) 6 SCC 555, the Hon'ble Apex Court has held as under;

"17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation..."

17. Therefore, in light of the facts that the address mentioned on the legal demand notice has not been denied by the accused throughout the trial and in view of the dictum of the Hon'ble apex court , it is safely adjudged that the legal demand notice was served upon the accused.

18. Now coming to the issue whether the accused has been able to rebut the presumption raised against them by application of Section 139 N I Act, it is a trite law that "once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of Negotiable Instruments Act has to be raised by the Court in favour of the complainant. The presumption referred to in Section 139 N I Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. What is required to be established by the accused is different from each case under given circumstances. But the fact remains that a mere plausible explanation is not expected from the accused CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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and it must be more than a plausible explanation by way of rebuttal evidence. In other words, defence raised by way of rebuttal evidence must be probable and capable of being accepted by the Court" (Rangappa vs. S. Mohan, (2010) 11 SCC 441). Therefore, it is clear that mere blank assertions on behalf of the accused are not sufficient to rebut the presumption mentioned in Section 139 N I Act. A probable defence must be raised by them.

19. In the case at hand, the complainant alleges that she was introduced to the accused by her husband who was also an investor of the accused company. She contends that an investment of Rs. 63,000/­ was made by her in the accused company with the promise of profitable returns. She further avers that the director of the accused company namely Mr. Sahil Sahore i.e. accused no.2 and Saiyed Zeesan Ali i.e. accused no.3 explained to her the benefits of the investment scheme. When despite passing of a sufficient amount of time, no returns were made by the accused, the complainant sought return of the money invested for which purpose the cheque in question was allegedly issued in her favour by the accused. However, the cheque issued got dishonoured despite which the accused persons failed to make the payment to her.

Per Contra, accused no.2, Sahil Sahore on his behalf and on behalf of accused no.1 company averred that the accused Saiyed Zeesan Ali was the kingpin of the entire investment scheme. He denied having any active role in the affairs of the accused company and also denied his liability towards the complainant. He, however, admitted his signatures on the cheque in question. Accused no.4, Deepali Sahore denied having her CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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signatures on the cheque in question and contended that she had resigned from the accused company in the year 2009 itself. She also denied having any liability towards the complainant. The other accused i.e. accused no.5 Gagan Kalia submitted that he had no involvement whatsoever in the business and day to day affairs of the accused company and he, thus denied owing any sum of money to the complainant.

20. U/S. 139 N I Act, it is presumed that the cheque was issued in favour of the complainant in discharge of any debt or liability. Further, Section 118(a) N I Act presumes existence of consideration against which the cheque is issued. Both these presumptions are rebuttable presumptions of law and as discussed above, the burden of rebutting which is upon the accused.

Further, as far as the extent of burden of proof upon the accused to rebut the presumption is concerned, it is settled that the accused may not even take the stand as a witness to rebut the said presumption and may rely upon the evidence of the complainant to rebut the same. The burden of proof upon the accused to rebut the presumption is only by preponderance of probabilities. Nevertheless, the accused has to raise a probable defence by creating doubts in the story of the complainant. This he can do even from the cross­examination of the complainant.

21. In the instant case, it was for the accused persons to prove by preponderance of probabilities that the cheque in question was not issued by them in discharge of any debt or liability. This, they could do from leading their own evidence or even from the cross­examination of the CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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witness of the complainant. Now, while the present complaint was filed by the complainant Savitri Devi, after the accused persons were summoned and when the application of the accused under Sec. 145(2) NI Act was allowed, the evidence was led by the special power of attorney holder of the complainant namely, Mr. Rajender Singh. When the application on behalf of the complainant for substitution of Power of Attorney holder was allowed, the Power of Attorney holder of the complainant was directed to exhibit his documents, but since the documents relied upon by him and his power of attorney were already exhibited on 05.08.2017, he was cross­examined by the opposite side. The authorised representative of the complainant, Rajender Singh in his cross­examination submitted that the complainant is his wife. He stated that his power to depose as a witness is mentioned in para no.6 of his POA and he denied that the Power of attorney filed by him does not authorise him to lead evidence in the present case. He further submitted that he was present during the commercial dealings between his wife and the accused. He also averred that the cheque in question was given by accused no.2. He admitted that there is no document on the court record which shows that accused no.4 and accused no.5 are the director and manager of accused no.1 respectively. He denied the suggestion that it was only accused no.3 Zeeshan Ali who explained to him the conditions of the scheme and volunteered that accused no.2 Sahil Sahore explained it to them. Now, the counsel for the accused contends that since the Power of attorney holder of the complainant lacks any personal knowledge of the arrangement between the parties, his evidence lacks value. It is thus contended that the accused persons cannot be convicted on his testimony alone.

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22. The apex court in A.C Narayanan vs. State of Maharashtra (2013 (11) SCALE 360), has laid down the following principles for cases where a complaint is instituted by a power of attorney holder of the complainant:

"26) While holding that there is no serious conflict between the decisions in MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and answer the questions in the following manner:
(i) Filing of complaint petition under Section 138 of N.I Act through power of attorney is perfectly legal and competent.
(ii) The Power of Attorney holder can depose and verify on oath before the Court in order to prove the contents of the complaint. However, the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions.
(iii) It is required by the complainant to make specific assertion as to the knowledge of the power of attorney holder in the said transaction explicitly in the complaint and the power of attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case.
(iv) In the light of section 145 of N.I Act, it is open to the Magistrate to rely upon the verification in the form of affidavit filed by the complainant in support of the complaint under Section 138 of the N.I Act and the Magistrate is neither mandatorily obliged to call upon the complainant to remain present before the Court, nor to examine the complainant of his witness upon oath for taking the decision whether or not to issue process on the complaint under CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.
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Section 138 of the N.I. Act.
(v) The functions under the general power of attorney cannot be delegated to another person without specific clause permitting the same in the power of attorney. Nevertheless, the general power of attorney itself can be cancelled and be given to another person."

23. In the case at hand, the complaint was instituted by the complainant herself. It was only after the application of the accused persons under Sec.145(2) NI Act was allowed that the power of attorney holder of the complainant was substituted and he was examined and cross­examined. For the purposes of obtaining a judgement in her favour, the complainant in a case under Sec.138 NI Act should be able to prove her case beyond all reasonable doubts in case the accused is successful in shifting the initial onus that is placed on him. The accused may discharge his initial onus by either pinning holes in the story of the complainant or by leading his own evidence. When the complainant, Savitri Devi failed to appear before the court for her cross­examination, her authorised representative led the post­ summoning evidence and he only was cross­examined by the opposite side. This means that the accused persons could shift the onus of proof back upon the complainant by only cross­examining the POA holder of the complainant.

24. The apex court in A.C Narayanan (supra) had also observed thus:

"Keeping in mind various situations like inability as a result of sickness, old CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.
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age or death or staying abroad of the payee or holder in due course to appear and depose before the Court in order to prove the complaint, it is permissible for the Power of Attorney holder or for the legal representative(s) to file a complaint and/or continue with the pending criminal complaint for and on behalf of payee or holder in due course. However, it is expected that such power of attorney holder or legal representative(s) should have knowledge about the transaction in question so as to able to bring on record the truth of the grievance/offence, otherwise, no criminal justice could be achieved in case payee or holder in due course, is unable to sign, appear or depose as complainant due to above quoted reasons. Keeping these aspects in mind, in MMTC (supra), this Court had taken the view that if complaint is filed for and on behalf of payee or holder in due course, that is good enough compliance with Section 142 of N.I. Act."

Thus, the principles expounded in the said case can be applied mutatis mutandis to the facts of the present case as well. In the present case, the complainant herself, in her complaint had mentioned that her husband was informed of the investment scheme of the accused company by one Amir Hassan. Since, her husband was already an investor in accused no.1 company, he introduced even the complainant to the scheme. She has also mentioned in her complaint that part of the money invested by her was transferred from her husband's bank account. Even the Power of attorney of the complainant, Rajendra Singh in his cross­examination deposed that he was present during the negotiations between the parties and on a bare reading of his testimony, it is clear that his testimony could not rebutted by the opposite side. The Hon'ble top court in A.C Narayanan (supra) has laid CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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down that the attorney holder of the complainant can continue a pending criminal complaint on behalf of the payee if he has knowledge of the transaction between the parties. The POA holder of the complainant in the present case is her husband who has due knowledge of the agreement between the parties and since his deposition before the court has remained unimpeached, the argument of the accused persons that he is not a competent witness falls to the ground.

25. Another pivotal issue raised by ld. counsel for accused is that the accused no.2 Sh. Sahil Sahore, accused no.4 Deepali Sahore and accused no.5 Gagan Kalia had no say in the conduct of the affairs of the company and they were also not in charge of the business of the accused company. While, accused no.2 has not denied that he was one of the directors of accused no.1 company, he has alleged that it was accused no.3 Zeesan Ali only who was managing the affairs of the accused company and who has absconded to avoid his liabilities. The complainant in her complaint has made specific averments as to the involvement of accused no.2 Sahil Sahore in her transaction with the accused company. She has contended that both accused no.2 Sahil Sahore and accused no.3 Zeesan Ali had explained the terms of the scheme to her. Further, even the power of attorney holder of the complainant had denied the suggestion of ld. counsel for accused that only accused no.3 had described the conditions of the scheme to them. He infact specifically asserted that accused no.2 Sahil Sahore had described the benefits of the scheme to them. For the purposes of imposing vicarious liability upon the director/manager of company under Sec.141 NI Act, it is essential that the said person was in charge of or was responsible for the CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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conduct of business of the complainant at the time of commission of the crime. Now, while the complainant has been able to prove the said fact with respect to accused no. 2, accused no.2 Sahil Sahore has been unable to disprove the same even by preponderance of probabilities. He has never denied that he wasn't the director of accused no.1 company and he has also not subjected his version to the test of cross­examination by the opposite side. Even from the cross­examination of the power of attorney holder of the complainant, he has been unable to disprove the said fact. Therefore, even this defence on behalf of accused no.2 cannot be construed as a probable defence. It seems to be merely an ipsi dixit.

26. Now, accused no.4 in her statement under Sec. 313 of CrPC averred that she had resigned from the accused no.1 company in the year 2009 itself. She, although has not led any evidence in support of the said fact. Accused no.5 Gagan Kalia in his statement under Sec. 313 of CrPC as well as in his evidence denied having any concern with accused no.1 company. He has instead stated that at the relevant time, he was employed with another company. Both the said accused have not signed upon the cheque in question. The complainant in her complaint has nowhere made any specific averments as to the involvement of accused no.4 Deepali Sahore and accused no. 5 Gagan Kalia in the transaction between her and the accused company. Now, even if it is presumed for the sake of arguments that accused no.4 and 5 were the director and manager of the accused no.1 company then also as per the dictum of the Hon'ble apex court in S.M.S. Pharmaceuticals Ltd (Supra), mere holding of a post or position does not make them liable under Sec.138 r/w Sec. 141 NI Act, unless it is shown that CC no. 9485/19 Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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the offence has been committed with the consent or connivance or is attributable to neglect on the part of any of the holders of these offices in accused company. The complainant has failed to disclose any such facts in her complaint and has also failed to prove the same by leading of evidence. Thus, the said accused i.e. accused no.4 and accused no.5 cannot be held liable for the offence.

27. As the complainant has failed to prove the essential principles for imposing liability upon accused no.4 and 5, they cannot be held liable for the offence under Sec.138 r/w Sec. 141 NI Act. However, in the absence of any probable defence being raised by accused no.2 to rebut the presumption under Section 138 Negotiable instruments Act and in the light of the aforesaid provisions of law & judgments, this Court deems it fit to hold that accused no.2 has failed to rebut the presumption against him u/S. 139 N I Act, even by preponderance of probabilities. Accused no.2 has failed to discharge the burden of proof upon him either by producing his own evidence or by shaking the credibility of complainant's evidence. On failure of accused no.2 to discharge the burden upon him, it is fit to hold that the complainant has been able to prove the offence under Section 138 r/w 141 of the Negotiable Instruments Act against him beyond the shadow of reasonable doubts. Accordingly, since all the ingredients of Section 138 r/w Sec. 141 NI Act have been satisfied against accused no.1 M/S Blossom Well Training Developments Pvt Ltd and accused no. 2 Sahil Sahore, they are hereby convicted for the offence under Sec.138 r/w 141 Negotiable Instruments Act. Accused no.4 Deepali Sahore and accused no.5 Gagan Kalia are however acquitted for the said offence.

CC no. 9485/19

Savitri Devi Vs. M/S Blossom Well Training Developments Pvt Ltd & Ors.

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28. Let the convict be heard on the point of sentence.

29. Copy of the judgment be given to convict, free of cost.

30. This Judgment contains 27 pages. Every Page of this Judgment has been signed by me. 

                                                              UDITA       Digitally signed by
                                                                          UDITA JAIN

                                                              JAIN        Date: 2020.02.27
                                                                          17:17:01 +0800

Announced in the open Court                                   (Udita Jain)
on 22. 02. 2020                                     MM (NI Act­08)/Dwarka Courts
                                                              New Delh




CC no. 9485/19
Savitri Devi Vs.

M/S Blossom Well Training Developments Pvt Ltd & Ors.

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