Delhi District Court
:: vs . :: on 27 June, 2017
IN THE COURT OF SHRI SUMEET ANAND
METROPOLITAN MAGISTRATE - 01 (N.I. ACT)
PATIALA HOUSE COURTS : NEW DELHI
Indian Renewable Energy Developments Agency Ltd.
(IREDA)
3rd Floor, August Kranti Bhawan,
Bhikaji Cama Place, New Delhi-110066.
................... Complainant
:: VS. ::
1. M/s Orissa Sponge Iron & Stell Ltd.,
OSIL House, Gangadhar Mehar Marg,
Bhubneshwar, Orissa-751024.
ASLO At:
i) Chaterjee International Centre, 11th Floor, 33-A,
Jawaharlal Nehru Road, Kolkata-700071.
ii) H-1A, 2nd Floor, Hauz Khas,
New Delhi-110016.
2. Shri P.K. Mohanty
Vice Chairman & Managing Director
& Authorized Signatory
CC No.19117/16 Page 1 of 23
M/s Orissa Sponge Iron & Steel Ltd.
3. Sh. M. Mohanty
Director & Authorized Signatory
M/s Orissa Sponge Iron & Steel Ltd.
...................Accused persons
Old Case Number. : 317/1
New Case Number. : 19117/16
Date of Institution of Case. : 07.06.2013
Offence Complained Of. : 138 NI Act
Plea of the Accused. : Pleaded not guilty
Arguments Heard On. : 08.06.2017
Final Order. : Convicted.
Date of Judgment. : 27.06.2017
:: JUDGMENT :: -
INTRODUCTION TO THE CASE AND PARTIES:
1. This Judgment will decide and dispose off criminal complaint case No. 19117/16 (Old CC. No. 317/1) titled as Indian Renewable Energy Development Agency Ltd. Versus M/s Orissa Sponge Iron & Steel Ltd; instituted under section 138 of the Negotiable Instruments Act, 1881 (for short NI Act) for the dishonour of Two cheques for a sum of Rs. 76,61,562/-
(Seventy Six Lacs Sixty One Thousand Five Hundred Sixty Two Only) & Rs.72,57,399/- (Seventy Two Lacs CC No.19117/16 Page 2 of 23 Fifty Seven Thousand Three Hundred Ninety Nine Only) respectively.
2. The complainant herein is Indian Renewable Energy Development Agency Ltd (for short IREDA); a Government Company registered under the provisions of Companies Act 1956. It has arrayed M/s Orissa Sponge Iron & Steel Ltd as Accused No. 1 (hereinafter A-1) being the drawer of the dishonoured cheque. It has also arrayed one P.K. Mohanty as Accused No. 2 (hereinafter A-2) being the Vice-chairman as well as Managing Director and authorised signatory for A-1. Additionally, one M. Mohanty has also been arrayed as Accused No. 3 (hereinafter A-3) being the director as well as authorised signatory for A-1.
PRECIS OF THE COMPLAINT:
3. A-1 availed a loan facility of Rs. 4000.00 Lakhs from IREDA for setting up a 24 MW capacity Power Plant utilizing Waste Heat Recovery Boiler and Fluidized Bed Combustion (FBC) Boiler in village Tangarani, P.O. Palaspanga, Keonjhar District in the state of Orissa, in the project known as Project No.1746.
4. The loan was advanced on the terms and conditions contained in the loan agreement dated 02.01.2006 as executed between the parties.
5. The dishonoured cheques in question for a sum of Rs. 76,61,562/- (Seventy Six Lacs Sixty One Thousand Five Hundred Sixty Two Only) & Rs.72,57,399/- (Seventy Two Lacs Fifty Seven Thousand Three Hundred Ninety Nine Only) CC No.19117/16 Page 3 of 23 respectively drawn and furnished by A-1 to IREDA towards repayment of its dues, were returned back unpaid with the remarks "Funds Insufficient".
6. The complainant thereafter set the legal course into motion and issued statutory legal demand notice dated 18.04.2013 to the accused demanding the amount of the dishonoured cheques within 15 days from receipt of notice.
7. The grievance of the complainant is that despite due service of the legal demand notice and despite due compliance of all other statutory requirements, the accused have failed to make the payment of the dishonoured cheques. Hence, this complaint.
DOCUMENTS FILED AND RELIED UPON BY THE COMPLAINANT:
8. EX CW 1/K is the complaint. EX CW 1/X is the evidence by way of affidavit of one Piyush Kumar, Manager (Law) of IREDA, who instituted the present complaint for IREDA. EX CW 1/I is the evidence by way of affidavit of one Manish Chandra, also Manager (Law) of IREDA, who after the summoning of accused persons substituted Piyush Kumar and thereafter prosecuted the present complaint for IREDA. The details and particulars of the documents mentioned in EX CW 1/X & EX CW 1/I and relied upon by the complainant during the trial are as follows;
EX CW 1/A is the Certified copy of circular dated 21st May, 2004 issued by IREDA in pursuance of Board Resolution dated 18th May, 2004 based on which the Authorised CC No.19117/16 Page 4 of 23 Representatives of the complainant have instituted and prosecuted this case for IREDA.
EX CW 1/B is the copy of the Loan Agreement dated 02.01.2006 as entered between the parties.
EX CW 1/C & Ex. CW 1/D are the dishonoured cheques in question for a sum of Rs. 76,61,562/-, bearing No.'921841' & Rs.72,57,399/-, bearing No.'921842' respectively, both drawn on State Bank of India, Park Street, Calcutta.
EX CW 1/E & Ex. CW 1/F are the returning memos with remarks 'Funds Insufficient' qua the dishonoured cheques in question issued by the bank of the Drawer (Accused bank).
EX CW 1/G & Ex. CW 1/H are the return statement carrying remarks 'Funds Insufficient' qua the dishonoured cheques in question issued by the bank of the Drawee (Complainant's bank).
EX CW 1/I is the office copy of statutory legal demand notice dated 18.04.2013.
EX CW 1/J is the copy of postal receipts issued by the post and telegraph departments towards registered post of the legal notice.
Institution and prosecution of the case and Judicial Proceedings:
9. This case after its institution was first listed before this court on 21.06.2013. It was instituted for and on behalf of IREDA by CC No.19117/16 Page 5 of 23 one Piyush Kumar, Manager (Law) on the strength of EX CW 1/A. Based on EX CW1/A pre-summoning evidence was led and after taking cognizance of the offence, vide order dated 21.06.2013, this court summoned all the persons arrayed as accused.
10. After admitting A-2 and A-3 on bail, notice of accusation under Section 251 Cr.P.C. was served upon the accused. For A- 1 the notice of accusation was served upon A-2 being the Vice-
Chairman as well as Managing Director and authorized signatory for A-1. Consequently, the matter was posted for complainant's evidence at the post-summoning stage.
11. During the intervening period, the Hon'ble Supreme Court of India pronounced judgment in the case of Dashrath Rupsingh Rathod vs. State of Maharashtra [2014 VIII AD (SC) 293] and on the basis of ratio of this judgment, it was contented on behalf of the accused that since the recording of evidence has not commenced, therefore this case is liable to be returned to the complainant for presenting it before the court having jurisdiction in terms of ratio of judgment of Dashrath Rupsing Rathod's case.
12. This contention of the accused was rejected vide detailed order dated 11.11.2014. The same got affirmation of the Ld. Sessions Court vide order dated 17.01.2015 in Revision Petition.
13. Although, order-sheet dated 04.03.2015 of this court records that counsel for accused has preferred a petition under Section 482 Cr.P.C. before Hon'ble High Court of Delhi against CC No.19117/16 Page 6 of 23 order dated 17.01.2015 passed by Ld. Revisionist Court. However, no order from Hon'ble High Court of Delhi was received and moreover subsequently, the accused voluntarily proceeded with this case before this court on merits.
14. At the post-summoning evidence stage, complainant moved an application seeking substitution of his authorized representative. It was allowed vide order dated 18.09.2015 and Manish Chandra (Manager-Law) of IREDA substituted the previous authorised representative and he also filed his post- summoning evidence by way of affidavit (EX CW 1/I).
15. Manish Chandra was cross-examined as CW-1 by the counsel for accused. His cross-examination commenced on 07.12.2015 and continued till 27.02.2016. Apart from CW-1, the complainant did not examine any other witness in support of its case. It is pertinent highlight herein that CW-1 (Manish Chandra) in his evidence by way of affidavit relied upon the same documents already filed on record by the previous AR Piyush Kumar, the documents enumerated herein above.
16. Post complainant's evidence, the statement of A-2 and A- 3 was recorded under Section 313 Cr.P.C., wherein all incriminating facts appearing against them during trial were put to them, affording an opportunity to give explanation.
17. Both A-2 and A-3 in their statement recorded under Section 313 Cr.P.C., expressed their desire to lead defence evidence. However, on 14.12.2016, they stated before the court that they do not intend to lead any defence evidence.
CC No.19117/16 Page 7 of 23Their joint statement in this regard was recorded and matter was posted for final arguments.
18. On behalf of A-2 and A-3, bail bonds under Section 437-A Cr.P.C. have been filed, they are on record. The detailed final arguments on behalf of the parties were heard on 08.06.2017. The accused also filed its written arguments and relied upon three judgments; i) Indus Airways Pvt. Ltd. & Ors Vs. Magnum Aviation Pvt. Ltd. & Anr. (2014) 12 SCC 539; ii)Sudha Beevi Vs. State of Kerala & Anr. 2004 CRI.L.J.3418 & iii) A.C. Narayanan Vs. State of Maharashtra & Anr. JT 2013 (12) SC
524. On the other hand, the complainant did not file any written arguments, but placed reliance on one judgment Sampelly Satyanarayana Rao Vs. Indian Renewable Energy Development Agency Ltd. Crl. Appeal No.867 of 2016. The written arguments filed on behalf of the accused and the judgments relied upon by the parties have been retained in file CC No. 24862/16 (Old CC No. 361/1).
19. This court has heard the arguments of the parties at length and has perused the entire record. The written arguments filed on behalf of the accused and the judgments relied upon by the parties have also been taken into consideration.
20. Before adverting to appreciation of evidence, it will be beneficial to highlight the defence of accused. Accused have not filed application under Section 145(2) of NI Act. Therefore, their defence has to be ascertained from their plea recorded while serving of notice of accusation under Section 251 Cr.P.C.
CC No.19117/16 Page 8 of 23and also from the answers given by them to the questions put while recording their statement under Section 313 Cr.P.C. and from arguments put forth during the course of final arguments. Their defence is;
20.1 The present complaint has been instituted by an unauthorized person, as Piyush Kumar was not a witness/party to the transaction between the parties, as such he does not carry the knowledge of transaction and therefore is incompetent to institute this case.
20.2 The Board Resolution dated 18.05.2004, on the strength of which Piyush Kumar has instituted this case has not been placed on record. Copy of the circular dated 21.05.2004 issued in furtherance to the Board Resolution dated 18.05.2004 has also not been proved during the trial.
20.3 The complaint filed by Piyush Kumar cannot be proved by substituted authorized representative Manish Chandra as he was also not privy to the transaction between the parties and has no personal knowledge of the case. Moreover, the complaint was filed by Piyush Kumar and it bears his signatures and the substituted authorized representative has nowhere stated in his evidence affidavit that he has seen Piyush Kumar writing and signing and therefore he cannot prove the complaint filed by Piyush Kumar.
20.4 The complainant is guilty of concealment of facts and has not approached this court with clean hands. The complainant has failed to mention in his complaint that the repayment of the loan advanced to accused, both towards Principle sum and CC No.19117/16 Page 9 of 23 interest were to be repaid through a 'trust and retention account'.
20.5 The complainant has also suppressed the fact, which has been categorically admitted by CW-1 during his cross- examination that the complainant is attending joint lenders meeting with other lenders and one nominee of the complainant company has been appointed on the board of directors of A-1 and continuous effective talks for loan reconstruction are going on.
20.6 The complainant has also suppressed the fact, admitted by CW-1 in his cross-examination that for the repayment of loan there was a first charge over the mortgage/ hypothecated properties of A-1 which is Pari-Passu with other lenders of A-1; and the dishonored cheque in question was merely a secondary collateral security and there was no need for the complainant to put the cheques for encashment, particularly when the payment was being made through a trust and retention account and when the talks were going on in joint- lenders meetings for reschedulement of loan and particularly when the first charge was towards the fixed mortgaged/hypothecated properties.
20.7 The complainant has failed to supply the account statement to A-1, particularly when during the cross- examination CW-1 volunteered to produce and supply the same. Furthermore, the agreement between the parties specifically mandates, in case of default of payment, that the complainant shall issue a written notice categorically spelling-
CC No.19117/16 Page 10 of 23out the outstanding principle amount and the outstanding interest. However, in the case at hand, no such notice has been issued.
20.8 The complainant has miserably failed to prove during the trial, that the dishonored cheque in question has become enforceable as it has failed to prove any 'evidence of debt'. Moreover, the complainant has also failed to prove EX CW 1/E to EX CW 1/H i.e. the bank returning memos issued by the drawers as well as by the drawer's bank. Furthermore, the complainant has failed to prove the contents of legal notice EX CW 1/I, dated 18.04.2013 and has also failed to prove the service of notice through postal receipts which are EX CW 1/J as no one from the concerned postal department has been summoned and examined by the complainant.
21. Based on above raised defences the accused persons are seeking their acquittal from this case for the dishonor of two cheques for a sum of Rs. 76,61,562/- & Rs.72,57,399/- respectively Appreciation of Evidence:
22. Section 58 of the Indian Evidence Act, 1872 (hereinafter Evidence Act) stipulates that 'facts admitted need not be proved'. It reads as follows;
S. 58. Facts admitted need not be proved.; No fact need to be proved in any proceedings which the parties thereto or their agents agree to admit at the hearing, or which, before hearing, they agree to admit by any writing under their hands, CC No.19117/16 Page 11 of 23 or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings;
Provided that the court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions.
23. Based on section 58 of the evidence Act, the followings facts stand proved by admissions made by the accused persons in their plea recorded while serving of notice of accusation upon them as well as while recording of their statements under section 313 Cr.P.C; viz.
23.1 The dishonored cheques in question are drawn by A-1. It bear the signatures of A-2 & A-3 and it has been filled under their instructions. That A-2 is the Managing Director of A-1 and A-3 is also one of the Directors of A-1.
23.2 The parties entered into the loan agreement and IREDA advanced loan to A-1 for setting up a Plant utilizing Waste Heat Recovery Boiler and Fluidized Bed Combustion (FBC) Boiler.
23.3 The dishonored cheques in question have been returned back unpaid for the reason 'Funds Insufficient'.
24. All the accused persons in their plea recorded while serving notice of accusation categorically admitted having received the legal demand notice. However, A-2 & A-3 in their statement recorded under section 313 Cr.P.C did not so categorically admit. However, it is pertinent to highlight that they even did not categorically denied having received the legal demand notice. A-2 simply answered that he does not remember, if he received the notice and A-3 expressed CC No.19117/16 Page 12 of 23 the possibility that someone in his office might have received the legal notice.
25 The address of the accused persons mentioned on the legal demand notice is same as that mentioned on the memo of parties. It on the same address the court processes were issued to the accused persons, in reply to which they entered appearance before the court. It is not the case of the accused persons that they were never the residents of, or were not carrying business at the address mentioned in the legal notice. Hence, the fact that the legal demand notice was sent to the correct address of the accused persons coupled with the fact that at one significant stage of proceedings accused persons categorically admitted the receipt of legal notice, is in the opinion of this court sufficient proof that the accused persons duly received the legal demand notice.
26. Moreover, as it is manifest that the legal demand notice was correctly addresses, furthermore, the complainant has also placed on record the postal receipts specifying that the article was pre-paid and the complainant has also stated on oath to have dispatched the legal demand notice, accordingly by virtue of section 27 of the General Clauses Act, 1897 as well as by virtue of section 114 of the Evidence Act unless the contrary is proved, it has to be presumed that the service of the post was effected in the ordinary course of post. Henceforth, the onus of proof, in the existence of section 27 of the General Clauses Act and section 114 of the Evidence Act, was not upon the complainant to prove the service of legal demand notice. However, the onus of proof of non-receipt of the legal notice was upon the accused, who attempted to suggest its non-receipt CC No.19117/16 Page 13 of 23 while recording of his statement under section 313 Cr.P.C. However, the accused have failed to discharge this burden.
27. Accordingly, on the basis of the above-done discussion, this court safely comes to the conclusion that the legal demand notice dated 18.04.2013 EX CW 1/I was duly delivered to the accused persons.
28. Furthermore, it is undisputed that the accused persons did not give any reply to the legal demand notice issued by the complainant. The effect of not replying to the statutory legal demand notice has been discussed by the Hon'ble High Court of Delhi in para 21 of Santosh Mittal v Sudha Dayal, 2014 SCC OnLine DEL 4472 held that "admittedly no reply to the legal notice was sent thereby rebutting the allegations made by the complainant". As far back in the year 190 in "Kalu Ram v Sita Ram, 1980 RCR NOTE 44", it was held by this court that there were serious allegations are made in the notice and the defendant fail to sent any reply, then the allegations are deemed to have been admitted. Even in Rangappa (Supra) it was observed that faiure on the part of the accused to reply to statutory notice u/s 138 NI Act leads to the inference that there is merit in the complainant's version".
29. Accordingly, in light of the judgment and its ratio discussed herein above coupled with the fact that at one stage of proceedings accused categorically admitted having received the legal demand notice, but subsequently changed their stand, this court safely derives the inference that there is merit in the complainant's version.
CC No.19117/16 Page 14 of 2330. The argument of defence pertaining to the incompetency of the authorised representatives of the complainant to institute and prosecute this complaint is, in the humble opinion of this court, a meritless argument. The complainant herein is a Government of India Enterprise duly registered under the companies Act, 1956. This is an admitted position of fact and has not been controverted by the accused at any stage of proceedings. EX CW 1/A is the certified copy of one circular dated 21 st may, 2004 by IREDA. It bears the stamping of one S.K. Bhargava, General manager (F & A) & Company Secretary for IREDA. This certificate of stamping and the purported signatures of S.K. Bhargava on EX CW 1/A has not been questioned or challenged by the accused in the entire cross examination of CW-1. This aspect of EX CW 1/A being the certified copy issued by a competent authority in IREDA has gone totally uncontroverted and unrebutted and accordingly the same stands proved.
31. Now, the complainant being a Government of India Enterprise, all its acts and documents as well as circulars are within public domain. Accordingly, by virtue of section 77 of the Evidence Act, certified copies of public documents is by itself sufficient proof of its contents. Section 77 of the Evidence Act reads as follows;
S. 77. Proof of documents by production of certified copies.- Such certified copies may be produced in proof of the contents of the public documents or parts of the public such documents of which they purport to be copies.
32. EX CW 1/A specifically authorises the Managers of IREDA to institute and prosecute the cases for and on behalf of IREDA. CW-1 CC No.19117/16 Page 15 of 23 in his evidence by way of affidavit specifically contends to be the Manager (Law) of IREDA. However, the accused after questioning the veracity of EX CW 1/A specifically asked CW-1 about his present designation with the complainant company, but, neither directly, nor indirectly he questioned or even suggested that CW-1 is not holding the designation of Manager in IREDA, as alleged by CW-1 in his evidence by way of affidavit. Accordingly, the averment on oath of CW-1 that he is manager (Law) with IREDA went absolutely uncontroverted and unrebutted and the same also stands proved.
33. As far as the contention of the accused, that CW-1 in his cross- examination stated that he can bring the minutes book, recording the authorisation given to him to prosecute this case but he did not produce the same, is concerned, this court is of the humble opinion that its non-production does not cast any cloud of doubt on authorisation of CW-1 to prosecute this case. The accused itself failed to challenge the veracity of the certified document EX CW 1/A therefore the onus of proof never shifted to the complainant to bring any further document.
34. The defence of the accused that the complainant is guilty of concealment of facts, is in the opinion of this court again a meritless argument. Supressio verai is a pure question of fact and there is no straight jacket formula for ascertaining whether a party has concealed material particulars in his case or not. It depends from case to case and has to be understood as well as appreciated in the light of cause of action of the party concerned as such.
35. A party would be guilty of concealment of material facts only when the facts concealed are such that if they were pleaded then CC No.19117/16 Page 16 of 23 either there would be no cause of action at all or the cause of action would be different than the one being sought to be redressed by the party before the court. A cause of action is nothing but a bundle of facts conceiving an opportunity for the aggrieved to approach the court of law for redressal of infringement of his legal right. With respect to cases pertaining to dishonour of cheque, the cause of action completes / arise upon;
Issuance of cheques and its dishonour;
issuance of statutory legal demand notice within 30 days from the dishonour;
failure of accused to make payment within 15 days from receipt of notice;
institution of the complaint within 30 days from expiry of 15 days period.
36. Accordingly, in a complaint under section 138 of the NI Act, particularly with the existence of mandatory legal presumptions in favour of the complainant by virtue of section 118 and 139 of the NI Act, the obligation of the complainant is only to aver and show the existence of cause of action. Any further pleadings, in the opinion of this court, can be relevant for redressal, but absence of any further facts beyond those constituting the cause of action shall not certainly tantamount to concealment / Supressio Verai.
37. A bare perusal of the complaint filed by the complainant suggests that all relevant facts constituting a cause of action in favour of complainant duly exist. Hence, in the most humble opinion of this court it was not mandatory for the complainant to aver any CC No.19117/16 Page 17 of 23 further facts and therefore the complainant cannot be held guilty for concealment or suppression of material facts.
38. As far as the arguments of the accused that, the payment of the principal loan amount alongwith the interest was payable to the complainant through a Trust and Retention Account; the argument that the complainant is attending the Joint lenders meeting whereby talks of reconstruction of loan etc are being undertaken and the argument of the accused that a nominee of the complainant has been appointed on the board of the A-1, all are concerned, they do not make any difference with respect to the admitted existing liability of the accused towards the complainant. It is not the case of the accused that they do not have liability towards the complainant, rather there is categoric admission by the accused that their liability qua the complainant exists.
39. The admitted loan agreement stipulate the exact dates of repayments of loan amounts which have already elapsed. Moreover, from a bare perusal of the dishonoured cheque in question, the manner in which it is filled, it can be easily ascertained that it was issued towards the payment of a pre-ascertained amount. The cheque is filled by printing and it is categorically admitted by the accused persons that the cheque has been filled up upon their instructions. The printing of the exact amount payable alongwith date on the cheque manifestly suggest that on the date of issuance of the cheque, whenever it was issued, the liability was existing, pre-ascertained and crystalized one and not contingent upon anything.
CC No.19117/16 Page 18 of 2340. This brings us to the core of the defence of accused persons that the dishonoured cheque in question was not issued in discharge of any liability. It was issued merely as a "Secondary Security" and as per the agreement, when there was a "First Charge" existing on the movable and immovable assets of A-1 by way of mortgage and hypothecation, then presentation of the "Secondary Security"
cheques is incorrect and therefore dishonour of such cheques does not attract the rigour of section 138 of the NI Act. .
41. As already highlighted that the entire body of the dishonoured cheque including the date is printed, therefore it had a validity of only three months from the date on which it was drawn. Now, if the argument of the accused is accepted that the dishonoured cheque in question was merely a "Secondary Security" and in case of any default in repayment of the loan, as per the terms of the agreement, it was incumbent upon the complainant to first proceed to recover the loan amount alongwith interest by resorting to foreclosure process of mortgaged / hypothecated properties and not by presentation of cheues directly, in such case, in the opinion of this court, there was no need to issue the cheques as such because in any case they would have turned into stale instruments carrying no value.
42. It is pertinent to highlight herein that the words and phrases such as "Primary Security" and "Secondary Security" as vehemently impressed upon by the accused during the course of his final arguments does not even find mention in the entire body of agreement as entered into between parties. There is nothing in the entire agreement mandating the complainant, in case of default of CC No.19117/16 Page 19 of 23 repayment of the loan, to first take steps to recover the loan amount including interest by first proceeding with foreclosure of mortgaged / hypothecated properties.
43. Similarly, there is nothing in the entire agreement restricting the complainant, in case of default of payment of loan, from directly proceeding with the presentation of the post-dated cheques issued by accused for realisation of repayment.
44. The accused herein is manifestly trying to interpret the word "FIRST" written in schedule of "Securities" before the mortgage of immovable and hypothecation of movable properties to his own convenience. As already discussed, if in case of default of re- payment of loan, it was to be recovered by the immovable and movable properties of accused, then there was no occasion to issue post-dated cheques. Atleast there was no occasion to put any specific date and mentioning of specific amount on the cheques. The mere mentioning of dates and exact amount to be repaid is suggestive of the fact that there was no embargo upon the complainant to proceed for realisation of defaulted amount, either by presentation of post-dated cheques or through movable or immovable properties of accused.
45. This court has already concluded that all essential facts necessary for constituting the cause of action under section 138 of the NI Act stand complied with in this case, hence, by virtue of section 139 of the NI Act, unless the contrary is proved, it is mandatory for this court to presume that the dishonoured cheque in question was issued, in discharge of whole, or part of legally enforceable debt or any other liability.
CC No.19117/16 Page 20 of 2346. As all technical issues raised by accused have been found to be meritless by this court, to establish pre-ponderance of probability in favour of his defence, it was incumbent upon the accused to rebut this mandatory presumption by showing non-existence of any liability towards the complainant.
47. Law recognises two modes of rebutting the mandatory presumption of law raised by virtue of section 139 of the NI Act, i.e. either by effective cross examination of the complainant's witness, or by leading cogent defence evidence.
48. In the case at hand, the accused despite opportunity has preferred not to lead any defence evidence. However, it has conducted detailed cross-examination of the complainant's witness CW-1. However, in the most humble opinion of this court, considering the categoric admissions of existence of liability made by the accused persons in their statements recorded under section 313 Cr.P.C, there is no occasion for this court to even dwell into the cross-examination of CW-1
49. The relevant extracts from the statement of A-2 and A-3 recorded under section 313 Cr.P.C categorically admitting the existence of liability towards the complainant is as follows;
Relevant Extract of statement of A-2 P.K. Mohanty recorded under section 313 Cr.P.C "Q8 Do you want to say anything else?"
"Ans. The accused company in order to set up a power plant had taken loan from a consortium of lenders. IREDA is one of the lenders. Approximately a loan of rs. 67 crores was taken by the CC No.19117/16 Page 21 of 23 Accused No. 1 company from IREDA. In order to secure loans, various properties and other assets were mortgaged and they were pari passu between all the lenders. However, the accused No. 1 company could not perform well and therefore could not repay the loan. Now, at this stage the accused No. 1 company is trying to reconstruct itself and complete the pending projects. In this view there are constant meetings between the lenders and accused No. 1 company. We have paid approximately Rs. 72 crores already towars the principal amount and interest to IREDA. The company is likely to settle all its dues with all the lenders including IREDA. The company is not a wilful defaulter.
Relevant Extract of statement of A-3 M. Mohanty recorded under section 313 Cr.P.C "All the lenders including IREDA had been in discussion with the accused in joint lenders meeting from time to time to draw out a course of action for the company in terms of repayments of loans. The company is not a wilful defaulter."
50. On basis of categoric admission made by the accused persons as enumerated hereinabove, it is beyond any iota of any doubt that the accused persons had existing and legally enforceable debt towards the complainant company. Moreover, it has been categorically held by the Hon'ble Apex Court in the Judgment of Ram Naresh Vs. State of Chattisgarh (2012) 4 SCC 257, that where the accused exercises his right under section 313 Cr.P.C and gives explanation to the incriminating facts appearing against him, then the answers, if and insofar as they support the case of the prosecution can be used against the accused.
CC No.19117/16 Page 22 of 2351. Finally, as the drawer of the dishonoured cheque in question is a company and A-2 & A-3 have been arrayed vicariously for the dishonour of cheque belonging to A-1 company, even at the cost of repetition, it is manifest to highlight that the status of A2 and A-3 as managing Director and Director of A-1 respectively is admitted. Moreover, it is also admitted that both A-2 & A-3 are signatories to the dishonoured cheque. Furthermore, the defence raised by the accused persons does not even remotely bring the case near to any of the exceptions, or provisios appended to section 141 NI Act. Hence, Both A-2 & A-3 are vicariously liable for the dishonour of cheque drawn by A-1.
52. Accordingly, on the basis of the abovedone discussion this court comes to the conclusion that the dishonoured cheque in question was issued by the accused persons to the complainant in discharge of their existing legally enforceable debt, which upon its presentation was returned back unpaid for the reason "Funds Insufficient" and despite compliance of all statutory requirements the accused persons failed to make the payment of the dishonoured cheque to the complainant within the stipulated period of time. Hence, A-1 Ms Orrisa Sponge Iron & Steel Ltd, A-2 P.K. Mohanty and A-3 M. Mohanty are hereby held to be guilty and accordingly convicted for commission of offence of dishonour of two cheques for a sum of Rs. 76,61,562/- & Rs.72,57,399/- respectively.
Announced in the open (SUMEET ANAND) Court on 27th June, 2017 MM(N.I Act)/PHC/27.06.17 CC No.19117/16 Page 23 of 23