Delhi District Court
K M Fincorp Llp Through Kapil Marwah vs Akashyog Health Products Pvt. Ltd on 3 January, 2025
IN THE COURT OF SH. ANKIT SOLANKI : JMFC NI
DIGITAL COURT NUMBER 01, WEST DISTRICT, TIS
HAZARI COURTS COMPLEX
KM FINCORP LLP
Vs.
AKASHYOG HEAL PRODUCTS PVT. LTD. & ORS.
CC NI ACT No. 1046/2021
U/S 138 Negotiable Instruments Act, 1881
1. CC NI Act number : 1046/2021
2. Name of the complainant : KM FINCORP LLP
3. Name of the accused : AKASHYOG HEALTH PRODUCTS
PVT. LTD. & ORS.
4. Offence complained of or proved : U/S 138 of Negotiable Instruments
Act, 1881
5. Plea of the accused : Pleaded not guilty and claimed trial
6. Final Judgment/order : Convicted
7. Date of judgment/order : 03.01.2025
Date of Institution: 26.03.2021
Date of Reserving Judgment/Order: 28.11.2024
Date of Pronouncement of Judgment/Order : 03.01.2025
JUDGMENT
1. Vide this Judgment, this court shall dispose of the present complaint filed by KM FINCORP LLP (hereinafter referred to as 'the complainant company') against the accused persons U/S 138 of Negotiable Instruments Act, 1881 r/w Section 142 Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:35:35 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
1 Out of 41 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act').
Brief facts:
2. It is the case of the complainant company, that the complainant company is a limited liability partnership incorporated under the Limited Liability Partnership Act, 2008 and having its registered office address at 35/19, 2 nd Floor, East Patel Nagar, New Delhi-110008. The complaint is engaged in rendering services of financial advisory and debt syndication. Mr Kapil Marwah is one of the partners of the complainant and has been authorised to institute the present complaint on behalf of the complainant including to sign, verify and file the present complaint and to do all things related thereto. The accused persons had issued 8 cheques in favour of the complainant amounting to a total of Rs.30,00,000/- and when the said cheques were presented for realization, the same were returned dishonoured by the complainant's bank. The accused no.1 company operates and primarily carries out its business activities Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:35:43 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
2 Out of 41 from the address of the accused no.1/company at Ranipur, Haridwar, Uttarakhand and also has its GST Registration at the said Haridwar Address. The accused no.1/company is engaged in manufacturing of noodles and allied products. The accused no.2, 3 and 4 are the present Directors of the accused no.1/company.
The accused no.2, 3 and 4 are In-charge of and are also responsible for the conduct of the day to day business of the accused no.1/company at present and even at the time of issuance of the said cheques. The accused no.2 is the Promoter and the Director of the company and head of the management and also looks after the day to day business of the company. The accused no.2 is also the signatory of the dishonoured cheques.
The accused no.3 is an employee of the company and director of the company and looks after the management of the unit of the accused no.1/Company at SIDCUL, Haridwar. The accused no.4 is a Director who is also responsible for looking after the management and affairs of the accused no.1/company and is actively involved and in-charge of the conduct of business of Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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3 Out of 41 accused no.1. He is also a relative of the accused no.2. The accused no.3 and 4 were party to the agreement of the transaction between the complainant and accused no.1 and the issuance of the cheques in question. The accused no.1/company, through the accused no.2 approached the complainant through Mr. Kapil Marwah, the partner of the complainant to engage the complainant to render its services of financial advisory and debt syndication. The said engagement includes assistance for facilitating credit facilities for an amount of Rs.7,60,00,000/-
(Seven Crores and Sixty Lakhs Only) from a financial institution. The accused number 2, 3 and 4 agreed to remunerate the complainant for the services to be rendered by the complainant. The remuneration as agreed between the complainant and the accused persons was 4% of the total amount of loan sanctioned along with 18% Goods and Services Tax (GST) as applicable. The aforesaid agreement is also reflected in the e-mails dated 29th November 2020 and 5th December 2020 exchange between the complainant (through its Partner, Mr. Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:35:53 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
4 Out of 41 Kapil Marwah) and the accused no.1/company (through its Director, the accused no.2).
3. Pursuant to the aforesaid agreement, the complainant advised the accused no.1/company and assisted it in facilitating the credit being granted from Axis Bank to the tune of Rs.7,60,00,000/-
(Seven Crore Sixty Lakhs Only). Due to the services rendered by the complainant, the credit facilities were sanctioned to the accused no.1/company on 5th February 2021. On 05th February 2021, the accused no.2 forwarded the e-mail received by him from Axis Bank to the complainant with regards to the acceptance of sanction letter. On 10th February 2021, the accused no.1 acknowledged it acceptance of the sanction letter. On 09.02.2021, Mr. Kapil Marwah, the partner of the complainant sent an email to the accused no.1 and one of its Director, the accused no.2 raising is invoice of financial advisory services and debt syndication towards assistance in arranging credit facilities sanction from Axis Bank.
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.03
15:35:57
+0630
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KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
5 Out of 41
4.The accused no.1 issued eight cheques in favour of the complainant amounting to a total of Rs. 30,00,000/- (Rupees Thirty Lakhs). Particulars of the aforesaid cheques drawn on Indian Overseas Bank, Faridabad Branch issued by the accused no.1 in favour of the complaint are as follows:
Sr. Date of cheque Cheque no. Amount (in Rs.).
i) 09.02.2021 585703 4,00,000/-
ii) 09.02.2021 585704 4,00,000/-
iii) 09.02.2021 585705 4,00,000/-
iv) 09.02.2021 585706 4,00,000/-
v) 09.02.2021 585707 4,00,000/-
vi) 09.02.2021 585708 4,00,000/-
vii) 09.02.2021 585709 4,00,000/-
viii) 09.02.2021 585710 2,00,000/-
For the sake of brevity of reference hereinafter, the aforesaid cheques will hereinafter be referred to as "the said cheques". The said cheques were signed by the accused no.2 being the Director of the accused no.1. The accused no.2 is also responsible for the Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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6 Out of 41 day to day affairs and in-charge of the accused no.1/company.
The accused no.2 was present at the time when the cheques were issued. Further, at the time when the said cheques were issued, the accused no.2, 3 and 4 were in charge of an responsible for the conduct of the business of the accused no.1/company.
5. On 9th February 2021, the said cheques were deposited by the complainant with its Bank Axis Bank Ltd. 26/5, East Patel Nagar, New Delhi-110008. The complainant vide its e-mail dated 10th February 2021, also informed the accused persons that the said cheques were presented for payment as mutually agreed between them.
6. On 11th February 2021, the said cheques were returned dishonoured by the complainant's bank vide return memo dated 11.02.2020 due to the reason "Insufficient Funds". The complainant after receipt of said dishonoured cheques, sent a legal notice dated 03.03.2021 (statutory notice) to the accused persons by e-mail and through registered post but despite Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:36:12 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
7 Out of 41 receiving of the notice the accused persons did not bother to pay back his outstanding dues to the complainant. The accused had failed to pay the cheque amount to the complainant within stipulated time of 15 days, hence this complaint U/S 138/142 NI Act.
Proceedings before the Court:
7. The complaint was received by assignment in this Court. After perusing the complaint and hearing the arguments of the complainant on the point of summoning of the accused persons, prima facie it appeared that the offence U/S 138 NI Act, has been committed. Hence, cognizance of the offence U/S 138 NI Act was taken against the accused persons on 12.10.2021 and summons were issued to the accused.
8. Notice U/S 251 Cr.P.C. was framed against the accused no.2 and 4 on 17.02.2022 and accused no.3 on 02.04.2022 to which the accused pleaded not guilty and claimed trial. The accused persons further admitted that the cheque belongs to them and has Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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8 Out of 41 been dishonoured. Thereafter, considering the defence stated at the time of framing of notice by the accused, this court decided to allow cross examination of the complainant as per 145(2) NI Act, and the case was tried as a summons case. During complainant evidence, Partnr of complainant company has examined himself as CW-1. After due cross examination of CW-
1 by the Ld. Counsel for the accused, CE was closed in the present case on 23.07.2022. Statement of the accused no.2 and 4 U/S 313 CrPC was recorded on 11.10.2022, whereas the accused no.3 was recorded on 04.11.2022. After that the case was fixed for defence evidence. On 04.11.2022, accused no.2 Pratap Singh was examined as DW1 and accused no.2 Mukund Yadav as DW2. On 04.11.2022, vide joint statement of accused no.2, 3 and 4, DE was closed and the case was listed for final arguments.
9. Perusal of the record reveals that on 02.08.2023, an application u/s 311 Cr.P.C. alongwith the order dated 04.05.2023 passed by Hon'ble High Court was filed and arguments were Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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9 Out of 41 heard on the said application. After hearing the arguments on the abovesaid application, the matter was kept for orders. However, vide order dated 04.12.2023, the abovesaid application was dismissed. On 04.12.2023, fresh application u/s 311 Cr.P.C. was also filed by Ld. Counsel for the accused to summon the bank witness. Arguments were also heard on the abovesaid application and the matter was kept for orders on 17.02.2024. On 17.02.2024, the abovesaid application was allowed and the matter was kept for DE. On 27.04.2024, Sh. Ramakanta Subudhi was examined as DW3. Thereafter, DE was closed vide order dated 27.04.2024 vide separate statement of accused no.2 and the case was listed for final arguments. On 28.11.2024, final arguments were heard on behalf of both the sides and the matter was reserved for judgment on 03.01.2025.
Evidence:
10. To prove his case, the partner of the complainant company has examined as CW1 and has led his evidence by way of evidence affidavit Ex.CW1/A. Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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11. Complainant company has not examined any other witness in this case.
12. The accused company has examined Sh. Pratap Singh as DW1, Sh. Mukund Madhav as DW2 and Sh. Ramakanta Subudhi as DW3 in this case to disprove the complainant's case.
Arguments of both parties:
13. Ld. counsel for the complainant while reiterating the contents of the complaint has argued that all the requirements of Section 138, NI Act have been fulfilled by the complainant in the present case. He argued that the cheques in question were issued by the accused persons towards his legally enforceable liability. He further argued that when the cheques were presented before the bank for encashment, the same were dishonored on presentation vide return memo dated 11.02.2020 for reason 'Funds Insufficient'. Thereafter the legal notice dated 03.03.2021 was sent to the accused persons to make the payment within the 15 days stipulated period, but no payment Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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11 Out of 41 was made by the accused persons. Thus, all the ingredients of section 138 NI Act, have been duly satisfied and thus presumption U/S 139 NI Act, has been validly raised against the accused persons. Ld. Counsel submits that the accused persons have failed to raise any probable defence to disprove the case of complainant and to rebut the presumption U/S 139 NI Act.
Appreciation of evidence:
14. I have heard counsels on behalf of both the sides, perused the record as well as relevant provisions of law.
15. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first. Section 138, NI provides as under:
"Section 138.- 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 whole 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 Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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12 Out of 41 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 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.
16. It is well settled position of law that to constitute an offence under Section 138, NI Act, the following ingredients are required to be fulfilled:
I. drawing of the cheque by a person on an account maintained by him with a banker, II. The cheque was issued for payment to another person for discharge in whole/part any debt or liability;
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.03
15:36:41
+0630
CC NI ACT No. 1046/2021
KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
13 Out of 41 III. 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. RBI in its notification DBOD.AML BC.No.47/14.01.001/2011-12 has reduced the aforesaid period from 6 months to 3 months.
IV. Returning of the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque;
V. Giving notice in writing to the drawer of the cheque within 30 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount;
VI. Failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
The offence under Section 138, NI Act is made out against the drawer of the cheque, only when all the aforementioned ingredients are fulfilled.
17. In the present case at hand, the complainant has filed on record eight original cheques. In notice under Section 251 CrPC, the accused persons have admitted to issuing the cheques in question to the complainant against the loan of Rs.7,60,00,000/-
(Seven Crores and Sixty Lakhs Only) and admitted the signatures on the cheques in question. Therefore, ingredient number I stands fulfilled in the present case. Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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14 Out of 41
18. As per the RBI guidelines, it is essential for the cheques in question be presented within a period of three months from the date on which they are drawn and the same be returned as unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheques. In the case at hand, the cheques in question were returned vide return memo dated 11.02.2020 due to the reason "Funds Insufficient." By implication thereof, the cheques were presented within three months and the same were returned for Funds Insufficient. Therefore, Ingredient number III & IV stand fulfilled in the present case.
19. The legal notice dated 03.03.2021 was sent within 30 days of return of the bank memo indicating cheques in question being unpaid. The fact that the legal demand notice has made a clear and unambiguous demand for payment of the cheques in question is not disputed. The accused has admitted to the receipt of legal demand notice in notice u/s 251 CrPC, the ingredient Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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15 Out of 41 number V stands discharged by virtue of giving of legal demand notice within 30 days from the bank return memo.
20. Moving on, it is not disputed that the accused has not made the payment of the cheques amount within 15 days of the receipt of legal demand notice. Therefore, ingredient number VI also stands fulfilled in the present case.
21. Let us now move on to ingredient number II, 21.1. The NI Act raises two presumptions in favour of the holder of the cheque, i.e., complainant; firstly, with regard to the issuance of cheque for consideration, as contained in Section 118(a) and secondly, with regard to the fact that the holder of cheque received the same for discharge, in whole or in part, of any debt or other liability, as contained in Section 139 of the Act.
21.2. Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in the case of Basalingappa v. Mudibasappa [AIR 2019 SC 1983] held that:
I. Once the execution of cheque is admitted, Section 139 of the Act mandates that a presumption be drawn that the cheque in question was for the discharge of any debt or other liability.
II. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.03
15:36:54
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KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
16 Out of 41 III. To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by reference to the circumstances upon which they rely.
IV. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposes an evidentiary burden and not a persuasive burden.
It is therefore implied that the law regarding the presumption for the offence under Section 138, NI Act, the presumptions under Section 118(a) and Section 139 have to be compulsorily raised as soon as the execution of cheque by the accused is admitted or proved by the complainant and thereafter the burden is shifted upon the accused to prove otherwise.
21.3. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The Hon'ble Apex Court in Kumar Exports v. Sharma Carpets [(2009) 2 SCC 513], has laid down the benchmark for the burden of proof that the accused has to raise a doubt as to the presumption under Section 139, NI Act.
"The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions, an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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17 Out of 41 supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-
existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.03
15:37:04
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KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
18 Out of 41 21.4. To put in a nutshell, the intent behind the NI Act is to prevent financial frauds and affect the socio-economic well- being of the country. If the burden is placed on the complainant to prove the existence of liability against the accused, that would be too harsh as most of these transactions are in the nature of "friendly loan" and the accused would, in a normal circumstance, always deny the liability. Therefore, the legislation is drafted in a way so as to discharge the complainant from proving the liability and a presumption is raised by virtue of Section 139 read with Section 118(a) of the Act that the cheque if issued by the accused, then the same is deemed to be in discharge of some legally enforceable debt in favour of the complainant. The presumption is rebuttable and the accused "may" either prove that no legally enforceable debt existed or punch holes in the story of the complainant and give rise to a probable defence to rebut the presumption. As per the law discussed above, the burden of proof on the accused to raise a probable defence is that of "preponderance of probabilities", and not "beyond reasonable doubt." Once a probable defence is raised, then the onus is shifted to the complainant to establish that a legally enforceable liability existed in his favour and the burden of proof on complainant in this case is that of "beyond reasonable doubt."
21.5. The accused can rebut the presumption as raised under the NI Act by (a) putting forth his defence at the time of framing of notice u/s 251 CrPC; (b) cross-examining the complainant; (c) when statement of accused is recorded u/s 313 CrPC; (d) or by leading defence evidence, thereby demolishi15 ptng the case of the complainant. It is amply clear that the accused does not need to discharge his or her liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the Complainant.
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.03
15:37:08
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KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
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22. During final arguments stage, Ld. Counsel for the complainant had argued that:
1. The complainant had assisted in procuring a loan of Rs.7 Crores to the accused and had charged 4% commission alongwith G.S.T. for the same. The agreement was limited to getting the loan sanctioned. Since the complainant got the loan sanctioned, it is the duty of the accused to pay Rs.35.87 Lakhs as fee calculated at the rate of 4% on sanctioned amount of Rs.7.6 Crores.
2. The complainant had sent a legal demand notice within time, but the accused did not pay the amount stated in the cheques in question. He had not replied to it as well.
3. The accused has admitted that he had approached the complainant for getting the loan sanctioned.
4. The accused is well educated and had given signed cheques which shows that he had admitted his liability.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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5. The accused never opposed presentment of the cheques, although he was aware that the complainant was about to present the cheques in his bank.
6. The accused had, through e-mail accepted that he was to pay 4% commission to the complainant.
7. All ingredients of Section 138 NI Act have been fulfilled in the present case.
8. Cheating cases have also been filed against the present accused.
23. In support of his contentions, Ld. Counsel for the complainant has relied upon the following judgments:
In case of Bichitranada Behera vs. State of Orissa & Ors. 2023 SCC Online SC 1307, it has been held that:
"Acquiescence would mean a tacit or passive acceptance. It is implied and reluctant consent to an act. In other words, such an action would qualify a passive assent. Thus, when acquiescence takes place, it presupposes knowledge against a particular act. From the knowledge comes passive acceptance, therefore instead of taking any action against any alleged refusal to perform the original contract, despite adequate knowledge of its terms, and instead being allowed to continue by consciously ignoring it and thereafter proceeding further, acquiescence does Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03
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KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
21 Out of 41 not take place. As a consequence, it reintroduces a new implied agreement between the parties. Once such a situation arises, it is not open to the party that acquiesced itself to insist upon the compliance of the original terms. Hence, what is essential, is the conduct of the parties. We only dealt with the distinction involving a mere acquiescence. When acquiescence is followed by delay, it may become laches. Here again, we are incline to hold that the concept of acquiescence is to be seen on a case to case basis."
In case of Chairman, State Bank of India & Anr. Vs. M.J. James (2022) 2 Supreme Court Cases, 301, it has been held that:
"What is a reasonable time is not to be put in a straitjacket formula or judicially codified in the form of days, etc. as it depends upon the facts and circumstances of each case. A right not exercised for a long time is non-existent. Doctrine of delay and laches as well as acquiescence are applied to non- suit the litigants who approach the court/appellate authorities belatedly without any justifiable explanation for bringing action after unreasonable delay. In the present case, challenge to the order of dismissal from service by way of appeal was after four years and five months, which is certainly highly belated and beyond justifiable time. Without satisfactory explanation justifying the delay, it is difficult to hold that the appeal was preferred within a reasonable time. Pertinently, the challenge was primarily on the ground that the respondent was not allowed to be represented by a representative of his choice. The respondent knew that even if he were to succeed on this ground, as has happened in the writ Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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22 Out of 41 proceedings, fresh inquiry would not be prohibited as finality is not attached unless there is a legal or statutory bar, as aspect which has been also noticed in the impugned judgment. This is highlighted to show the prejudice cause to the appellants by the delayed challenge. We would, subsequently, examine the question of acquiescence and its judicial effect in the context of the present case."
In case of Ashok Yeshwant Badave Vs. Surendra Madhavrao Nighojakar (2001) 3 Supreme Court Cases 726, it has been held that:
"For prosecuting a person for an offence under Section 138 of the Act, it is inevitable that the cheque is presented to the banker within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier. When a post dated cheque is written or drawn, it is only a bill of exchange and so long the same remains a bills of exchange, the provisions of Section 138 are not applicable to the said instrument. The post dated cheque becomes a cheque within the meaning of Section 138 of the Act on the date which is written thereon and the 6 months period has to be reckoned for the purposes of proviso (a) to Section 138 of the Act from the said date. Thus while respectfully agreeing with the law laid down by this Court in the case of Anil Kumar Sawhney, we hold that six months period shall be reckoned from the date mentioned on the face of the cheque and not any earlier date on which the cheque was made over by the drawer to the drawee."
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:37:36 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
23 Out of 41 In case of Purushottam Vs. Manohar K. Deshmukh & Anr., it has been held that:
"The Ld. Counsel for the respondent submitted that a cheque would not come within a definition of cheque or bill of exchange if it is not drawn for certain sum of money.For this purpose, he relied on a decision of Andhra Pradesh High Court in case of Avon Organics Ltd. Vs. Pioneer Products Limited and Ors. 2004 (1) Crimes 567. The Ld. Counsel submitted that as held by Andhra Pradesh High Court, the complainant filling up amount portion and the date in a cheque amounted to a material alteration in a cheque without the consent of authority who issued the cheque and rendered the cheque invalid. A cheque has been defined as a bill of exchange in section 6 of the Negotiable Instruments Act. A bill of exchange is defined in Section 5 as an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money. Therefore, the High Court of Andhra Pradesh is right in holding that the cheque must be for payment of certain sum of money as required by Section 5 and 6 of the Negotiable Instruments Act. However, there can also be no dispute that a cheque or bill of exchange is a negotiable instrument, as defined in section 13 of the Act. In view of the provisions of section 20 of the act which were possibly not noticed by the Andhra Pradesh High Court, it is open to a person to sign and deliver a blank or incomplete instrument, and it is equally open for the holder to fill up blanks and specify the amount therein. This does not amount to any alteration in the cheque, since the cheque was not initially issued for any different specified sum which was changed.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:37:41 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
24 Out of 41 Therefore, the decision of the Andhra Pradesh High Court in Avon Organics Ltd case (Supra) may not be helpful to the respondent for rebutting the presumptions under Section 139 and under section 118 of the act which require a presumption to be made that the negotiable instrument was made for the consideration shown on the instrument, on the date which it bears."
"The Ld. Counsel for the respondent next submitted that the implication of Section 20 of the Act had been duly considered by the Andhra Pradesh High Court in M/s Cement Agencies Vs. V. Vijaya Babu and Anr.,1997(4) Crimes 273. In that case by the end of financial year 1993-94 an amount of Rs.16,790/- was payable by the accused and the accused issued cheque on 26.07.1994. It was dishonoured on 30th July, 1994 with an endorsement that it exceeds arrangements. The defence taken by the accused was that blank cheques were issued on 04.10.1991 and the complainant had acknowledged on the counter foil on the said cheques. First, question as to whether section 20 of the Negotiable Instruments Act enables a holder in due course of inchoate instrument to put a date of his choice is not addressed in the judgment of the Andhra Pradesh High Court. When a drawer of a cheque delivers a signed cheque, he obviously gives an authority to the holder to put a date of his choice. Therefore, there would be no question of the instrument becoming time barred, since it would become time barred only from the date on the cheque, which under Section 20, the holder had the authority to fill. Hence, the decision of Andhra Pradesh High Court in M/s Cement Agencies may also be not helpful to the respondent."
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:37:47 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
25 Out of 41 "Since a cheque is a promise made in writing to pay certain sum, it would be covered by Clause 3 of the Section 25 and, therefore, it would not be open for the accused to say that there is no legally enforceable liability. In view of this the Ld. Counsel for the appellant submitted that the Ld. Magistrate was in error in acquitting the accused holding that the cheque was not given for legally enforceable liability. Consequently, the acquittal of the respondent for offence punishable under Section 138 of Negotiable Instruments Act cannot be upheld."
In case of Rajesh Jain vs. Ajay Singh (2023) 10 Supreme Court Cases 148, it has been held that:
"The Court will necessarily presume that the cheque had been issued towards discharge of a legally enforceable debt/liability in two circumstances. Firstly, when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves that cheque was issued/executed in his favour by the drawer. The circumstances set out above form the fact(s) which bring about the activation of the presumptive clause. [Bharat Barrel Vs. Amin Chand] [(1999) 3 SCC 35]."
24. On the other hand, Ld. Counsel for the accused has submitted that:
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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1. There was no written agreement between the complainant and the accused with respect to 4% commission.
2. In the e-mail filed on record by the complainant, he had stated that the accused would get the principle amount. However, the accused did not receive the same. Therefore, there is no legal liability due towards the complainant.
3. Undated cheques were given by the accused to the complainant.
4. The complainant promised to sanction a loan of around Rs.8-9 Crores for the accused. However, the actual amount that got sanctioned was Rs.7 Crores 60 Lakhs.
5. The complainant had asked for cheques of Rs.5 Lakhs but the cheques in question are of different amounts that is Rs.4 Lakhs and Rs.2 Lakhs.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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6. How can the complainant charge a processing fee from the accused when bank itself does not charge any processing fee?
7. Commission agreed as per the complainant was of Rs.35.87 Lakhs but why is the total cheque amount of Rs.30 Lakhs?
8. The agreement was that the complainant shall assist the accused in "grant" of loan and not limited to sanctioning and since the accused did not get the loan, there is no question of any fees.
9. Invoice has been raised by the complainant before sanctioning of the loan which is not possible.
10. Invoices have been signed by Sangeeta Marwah who has not been called as a witness.
11. Cheques in question have been misused by the complainant.
25. In support of his contentions, Ld. Counsel for the accused has relied upon the following judgments:
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:38:01 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
28 Out of 41 In case of Bangalore Electricity Supply Company Ltd.
(BESCOM) Vs. E.S. Solar Power Pvt. Ltd., 2021 SCC Online SC 358, it has been held that:
"The duty of the Court is not to delve deep into the intricies of human mind to explore the undisclosed intention, but only to take the meaning of words used i.e. to say expressed intentions (Smt. Kamala Devi Vs. Seth Takhatmal & Anr.). In seeking to construe a clause in a contract, there is no scope for adopting either a liberal or a narrow approach, whatever that may mean. The exercise which has to be undertaken is to determine what the words used mean. It can happen that in doing so one is driven to the conclusion that clause is ambiguous, and that it has two possible meanings. In those circumstances, the Court has to prefer one above the other in accordance with the settled principles. If one meaning if more in accord with what the Court considers to the underlined purpose and intent of the contract, or part of it, than the other, then the court will choose former or rather thatn the later. Ashville Investment Vs. Elmer Contractors. The intention of the parties must be understood from the language they have used. Considered in the light of the surrounding circumstances and object of the contract. Bank of India and Anr. Vs. K. Mohandas and Ors. Every contract is to be considered with reference to its object and the whole of its terms and accordingly the whole context must be considered in endeavouring to collect the intention of the parties, even though the immediate object of inquiry is the meaning of an isolated clause. Bihar State Electricity Board, Patna and Ors. Vs. M/s Green Rubber Industries and Ors."
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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29 Out of 41 In case of Moolji Jaitha & Co. Vs. Seth Kirodimal, AIR 1961 Ker 21, it has been held that:
"To properly evaluate the aforesaid contentions of the parties we have to consider the law regarding offers counter offers and acceptance in the Law of Contracts. It is well settled that the offeree must unreservedly assent to the exact terms of the offer to bring about a concluded contract. If, on the other hand, while purporting to accept the offer as a whole, he introduces a new term which the offeror has had no opportunity of examining, he is in fact merely making a counter offer. The effect of such a counter offer in the eyes of law is to destroy the original offer. It is equally well settled that an offer once refused is dead and cannot, be accepted unless renewed. But it is sometimes difficult to determine whether a communication by the offeree amounts to a counter offer or not. The offeree, for example may be seeking further information before making up his mind or may be but making an enquiry as to whether the offeror will not modify his terms. Such requests do not obliterate the original offer. Section 7 of the Indian Contract Act enacts the same rule that in order to convert a proposal into a promise the acceptance must be absolute i.e. that an acceptance."
"In the light of the above statement of the principles of law regarding offers, counter offers and acceptances if we examine the facts of this case, what we find is that the defendant's telegram dated 15.1.1952, Ext.B, is not an acceptance but only a counter offer, offering to purchase 660 tins of coconut oil at Rs.33 per tin. If that be so, the original offer of the plaintiff, Ext. A, is obliterated.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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30 Out of 41 To this counter offer, Ext. B, the plaintiff replied by Ext. C, by which also he did not accept the counter offer in absolute and unqualified words but added a term by demanding an advance remittance. This demand for advance remittance by the plaintiff was never accepted by the defendant at any stage in the correspondence. Therefore, it is difficult to hold that there was a concluded contract between the parties.
There is yet another difficulty which the plaintiff has to surmount in this case. Even in demanding an advance remittance Ext. C did not specify the amount. Before the amount of advance demanded was also fixed by agreement."
In case of Badri Prasad Vs. The State of Madhya Pradesh, (1971) 3 SCC 23, it has been held that:
"This brings us to the last point, namely, whether a new contract was concluded between the Government and the plaintiff. It is extremely doubtful whether the letter dated February 1, 1995, is an offer. It seems to be an invitation to the plaintiff to make offer. Be that as it may, even if it is treated as an offer, there was no unconditional acceptance by the letter, dated February 5, 1995. The plaintiff expressly reserved his right to claim a refund of Rs.17,000/-. According to the letter of the Divisional Forest Officer, dated February 1, 1995, the plaintiff had to give up his claim to Rs.17,000/- which he had already paid and had to pay a further sum of Rs.17,000/-. The High Court, in our opinion, rightly held that the alleged acceptance of the offer made on February 1, 1995, was conditional and qualified."
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:38:15 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
31 Out of 41 In case of Kaliburn Engineering Ltd. Vs. Oil and Natural Gas Corporation Ltd., (AIR 2000 Bom 405), it has been held that:
"In this factual matrix, my endeavour would be to interpret this letter, Exh.1, as to whether this letter would amount to acceptance of the offer made by the plaintiff. As per Section 7 of the Contract Act, the acceptance of the offer must be absolute. It must be absolute and unqualified and it should be expressed in some usual and reasonable manner unless the tender prescribed by any other manner in which it should be accepted. The cardinal principal, in the light of the Section 7 of the Contract Act is that the offer and acceptance of an offeror must be absolute without giving any room of doubt. It is well settled that the offer and acceptance must be based or founded on three components: Certainly, commitment and communication. A contract is built upon three components as three pillors, certainty, commitment and communication. If any one of three components is lacking either in the offer or in the acceptance there cannot be a valid contract. One of the important components that is lacking in this case is certainty. The offer and acceptance must be devoid of any doubt either in the mind of the offeror or accepter as the case may be. It must be clear and unambigious. In this legal paradigm, we have to examine the letter in question whether it amount to a acceptance of an offer."
26. Ld. Counsel for the accused has also relied upon the following judgments:
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:38:19 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
32 Out of 41 Chhotey Lal Gupta vs. Union of India, AIR 1987 AlI 329 (Relevant Para no.15, 16, 17, 18, 19, 20, 21 and 25).
Union of India Vs. Uttam Singh Dugal & Co., AIR 1972 Del 110 (Relevant Para No.13, 14, 23, 27 and 29). Hans Kumar Jain Vs. Renu Gandotra @ Poonam, 2015 SCC Online Del 7846.
Indus Airways Pvt. Ltd. Vs. Magnum Aviation Pvt. Ltd. (2014) 12 SCC 539 (Relevant Para No.9).
Rangappa Vs. Sri Mohan (2010) 11 SCC 441.
Rajesh Jain Vs. Ajay Singh (2023) 10 SCC 148.
Krishna Janardhan Bhat Vs. Dattartrya G. Hegde (2008) 4 SCC 54.
Atul Pundhir Vs. Delhi Group & Anr. (2024) SCC 6648.
27. In the present case at hand, there are certain admitted facts like:
1. The accused had approached the complainant for getting a loan sanctioned.
2. The cheques in question have been signed by the accused.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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3. The accused had received the legal demand notice from the complainant and had not replied to it.
4. The accused had agreed to 4% commission to be given to the complainant out of the total loan amount.
5. The accused had received an e-mail from the complainant stating that the scope of the services was limited to getting the loan sanctioned.
28. Now, the main contention in the present case is that whether there is a concluded contract between the complainant and the accused or not and if yes whether the scope of the contract was limited to getting the loan sanctioned or it was extended to disbursement of funds to the accused. To decide the contention, it is pertinent here to read Section 7 of the Indian Contract Act, 1872.
29. It states that in order to convert a proposal into a promise the acceptance must- Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:38:30 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
34 Out of 41 (1) be absolute and unqualified;
(2) be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted.
If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in such manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but, if he fails to do so, he accepts the acceptance.
30. Now, Section 7 states that for a contract to be concluded, there must be an absolute and unqualified acceptance.
31. The complainant had sent an e-mail dated 29.11.2020 to the accused offering him to charge 5% commission on getting the loan sanctioned. The e-mail has not been disputed.
32. The accused had replied to that e-mail on 05.12.2020 stating 4% agreed. Now, this mail, in the humble opinion of this court Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:38:33 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
35 Out of 41 amounts to counter offer. Therefore, the accused had given a counter offer to the complainant and the complainant had accepted the same.
33. The accused had sent another e-mail dated 10.02.2021 to the complainant stating 'It is respectfully stated that we are accepting your offer of loan sanctioned, as we received a letter from your bank on e-mail dated 05.02.2021'.
34. It means that there was a concluded contract between the accused and the complainant.
35. The other contention is whether the scope of the contract was limited to getting the loan sanctioned to the accused by the complainant or it was extended till the disbursement of the loan by the bank to the accused.
36. The onus is on the accused to rebut the presumption u/s 118 and 139 of the NI Act. Also it is the accused who is averring that the scope was till the disbursement of loan. Therefore, the onus Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:38:38 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
36 Out of 41 of the same is on the accused. The accused has produced no evidence that the scope of the contract between the accused and the complainant was till disbursement of the loan by the bank to the accused.
37. Also no witness has been produced by the accused in support of his contention. Moreover, in his cross-examination, the accused has admitted that there is no document on record to show that the scope of the contract was beyond sanctioning of the alleged loan. He has also stated that he had received an e-
mail dated 29.11.2020 by the complainant wherein the scope of the contract was limited to sanctioning of the alleged loan.
38. He further stated that he did not agree to it and did not file a reply to the mail. He thereafter stated that he had a conversation with the complainant over phone and told the complainant that he did not agree with the terms. However, he has not mentioned the day or date on which this conversation, as alleged, took place. No document has been placed on record or no witness has Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:38:43 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
37 Out of 41 been produced to prove that a telephonic conversation took place between the two. The accused had also testified that he had received a sanction letter from the bank.
39. Therefore, the accused has not been able to prove that the scope of the contract was not limited to getting the loan sanctioned, rather it extended to disbursement of funds to the accused.
40. Apart from that there are certain contradictions in the version of the accused:
1. Firstly in his cross, the accused has stated that he never took any financial assistance from the complainant whereas in the statement of accused, he has categorically admitted that he approached the complainant for grant of the alleged loan from the bank.
2. Secondly the accused has in his cross-examination stated that he had not replied to the e-mail sent by the Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:38:48 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
38 Out of 41 complainant whereas the complainant has placed on record dated 05.12.2020 sent by the accused to the complainant stating that he agrees to 4% commission on getting alleged loan sanctioned.
3. Thirdly the accused had stated that he had given blank security cheques to the complainant, whereas at the stage of examination, he had stated that 7 cheques were of Rs.4 Lakhs and one of Rs.2 Lakhs, which means that the amount in the cheques in question were filled by the accused only.
4. Also the accused had stated that he had not sent a reply to the e-mail of the complainant but on perusal of documents filed by the complainant, it is clear that the accused sent a counter offer of 4% commission to the complainant. He has agreed to the same at the stage of his examination also. Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
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5. The accused has in his cross-examination stated that there was no GST payable on the commission to be paid to the complainant. However, the accused had issued cheques totalling to Rs.30 Lakhs which is more than 4% commission agreed between the complainant and accused.
It gives a hint that the accused was aware of 18% GST payable on 4% commission.
6. Invoices of the transaction was delivered to the accused which is Annexure C-5 and the complainant states that he has paid 18% GST on the fee charged from the complainant.
41. Taking into account the above discussion, this court is of the considered opinion that there was a concluded contract between the complainant and the accused and its scope was limited to the complainant getting the loan sanctioned to the accused. The same was duly performed by the complainant as the accused had accepted the same through e-mail dated 10.02.2024. Therefore, Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:38:56 +0630 CC NI ACT No. 1046/2021 KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
40 Out of 41 the accused owed a legal liability towards the complainant.
Thereafter, the accused has not been able to rebut the presumption u/s 118 and 139 of the Act. Apart from that, there are certain contradictions in the version of the accused.
42. In the humble opinion of this court, the complainant has been successful in proving the case on the basis of preponderance of probabilities.
43. Since all the ingredients of Section 138 NI Act have been fulfilled, accused persons are convicted of the offence of Section 138 NI Act.
44. Copy of this Judgment be given free of cost to both the parties.
Announced in open Court Digitally signed by ANKIT Today on this 03.01.2025. ANKIT SOLANKI SOLANKI Date:
2025.01.03 15:39:01 +0630 (Ankit Solanki) Judicial Magistrate First Class (NI ACT) Digital Court No.1 Tis Hazar Courts, West, Delhi.CC NI ACT No. 1046/2021
KM Fincorp LLP Vs. Akashyog Health Products Pvt. Ltd. & Ors.
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