Delhi District Court
"Aneeta Hada vs M/S Godfather Travels & Tours on 19 April, 2022
IN THE COURT OF MS. MANSI MALIK,
METROPOLITAN MAGISTRATE, NORTH-WEST-03,
ROHINI COURTS, DELHI
CC No. 6608/2016
Sh. Rishabh Rustagi
S/o Sh. Devender Rustagi
R/o H. No. 100, D- Block,
PKT- 14, Sector- 8, Rohini
Delhi
.........Complainant
v.
Sh. Alakshendra Chauhan
Director of Ratoid
Office at: C/1/60,
Budh Vihar, Phase-I,
New Delhi- 110086
Also at: C-1/54, Budh Vihar,
Phase- I, New Delhi- 110086
...............Accused
Date of institution of case : 05.08.2015
Date of reserving the judgment : 05.04.2022
Date of pronouncement of judgment : 19.04.2022
JUDGMENT
1. S. No. of the Case : 6608/2016
2. Date of institution of the case : 05.08.2015
3. Name of the complainant : Sh. Rishabh Rustagi
4. Name of the accused : Sh. Alakshendra
Chauhan
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5. Offence complained or proved : 138 N.I. Act
6. Plea of Accused : "Not Guilty"
7. Final Order : Acquittal
8. Date of Final Order : 19.04.2022
BRIEF FACTS AND REASONS FOR DECISION
1. Vide this judgment, this Court shall dispose of the present complaint filed by the Complainant against the above-named accused under section 138 read with section 142 of Negotiable Instrument Act, 1881 (hereinafter referred to as N.I. Act) for dishonour of cheque bearing no. 003720 dated 10.05.2015 for Rs. 1,06,083/- drawn on Yes Bank, Branch Sector- 7, Rohini, New Delhi.
2. The brief facts of the case are as follows:-
(a) That the accused is running his company/business under the name and style of M/s Ratoid. That the accused is a known person of the complainant and that in last week of December, 2014, the accused approached the complainant for financial assistance of Rs 1 lakh to meet his family requirements.
(b) Considering the family relations as well as business relations,the complainant provided a loan amount of Rs. 1 lakh @ 12% per annum for a period of six months.
(c) That in the first week of May, 2015 the complainant demanded the aforesaid loan amount along with interest as agreed and the accused had in discharge of his legally CC no. 6608/2016 Rishabh Rustagi v Alkshendra Chauhan Page no.2 /14 enforceable liability issued a cheque to the complainant.
Details of the cheque are as under:-
Cheque Sr. No. Date Amount Drawn on No. 10.05.201
1. 003720 106083 Yes Bank 5
(d) That the complainant deposited the aforesaid cheque with his banker but the cheque was returned back dishonored vide bank memo dated 22.05.2015 with the remarks "account closed".
(e) That on 19.06.2015 the complainant sent legal notice to the accused and the accused failed to comply with the requirement of the said notice within the stipulated period of 15 days from the date of service of notice.
(f) That the accused has issued the said cheque in discharge of a credit liability knowing fully well that he has no sufficient funds in his bank account and had issued the said cheque with malafide intention to cheat the complainant and thus he has committed an offence U/s. 138 of the Negotiable Instrument Act. Hence, the present complaint has been filed.
3. After taking pre-summoning evidence, the Court took cognizance of the offence under section 138 NI Act and directed issuance of process against accused. In pursuance thereof, accused appeared before the Court and furnished Court Bail.
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4. Notice under Section 138 of the Negotiable Instruments Act was framed against the accused on 28.03.2017. In the notice, the accused pleaded not guilty and claimed trial.
5. In Complainant's Evidence (CE), the complainant has examined himself as CW-1 by way of tendering an affidavit of evidence which is Ex. CW1/1A. CW-1 was cross- examined at length by Ld. Counsel for accused. The complainant placed reliance on the following documents:-
(a) Ex. CW-1/A is the original cheque bearing no. 003720.
(b) Ex. CW-1/B is original cheque returning memo dated 05.06.2015.
(c) Ex. CW-1/C is copy of legal notice dated 19.06.2015.
(d) Ex. CW-1/D and Ex. CW-1/E are the speed post receipts.
(e) Ex. CW-1/F and Ex. CW-1/G are the courier receipts.
(f) Ex. CW-1/H and Ex. CW-1/I are the tracking reports.
(g) Ex. CW- 1/J is the reply of the legal notice dated 13.07.2015.
6. CW-1 was cross-examined at length by Ld. Counsel for accused. Thereafter, CE was closed vide order dated 24.07.2017. It was followed by recording of the statement of accused u/s 313 Cr.PC. All the incriminating evidence was put to accused to which he pleaded innocence and false implication. It was stated by the accused that he never took any loan from the complainant and never CC no. 6608/2016 Rishabh Rustagi v Alkshendra Chauhan Page no.4 /14 issued the cheque in question to the complainant and the same was misplaced from his office. He further stated that he does not know how the cheque came into the possession of the complainant and that the complainant has misused the same. The accused also stated that the account was closed by him when he came to know that the cheque has been misplaced and that he had made a complaint to the Bank in this respect. The accused also stated that he lodged the complaint but that there was no communication between them for the last 10 years and that the cheque has been misused by the complainant with an intention to extort money from him. The accused denied the receiving the legal notice and opted to lead defence evidence.
7. The accused examined himself as DW-1. DW-1 was cross-examined by the Ld. Counsel for the complainant. Thereafter, DE was closed vide order dated 18.07.2019 and matter was posted for final arguments.
8. During the course of arguments, it was argued on behalf of the complainant that all the ingredients of the offence under Section 138, NI Act, are fulfilled in the present case. On this basis, the complainant has argued that the presumption under Section 139 read with Section 118 of the NI Act lies in favour of the complainant and the accused has failed to rebut the presumption and raise a probable defence. Per contra; Ld. Counsel for the accused CC no. 6608/2016 Rishabh Rustagi v Alkshendra Chauhan Page no.5 /14 has opposed the arguments rendered on behalf of the complainant.
9. The Court has carefully perused the case record and has heard arguments advanced by Ld. Counsel for complainant as well as by Ld. Defence counsel.
10. The question in the present case revolves around whether the impugned cheque was issued towards the discharge in whole or in part of legally enforceable liability or debt as envisaged under section 138 NI Act. Thus it becomes apposite at this juncture to reproduce section 138 NI Act:
"138. Dishonour of cheque for insufficiency, etc., of funds in the accounts 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 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 extend to two year", or with fine which may extend CC no. 6608/2016 Rishabh Rustagi v Alkshendra Chauhan Page no.6 /14 to twice the amount of the cheque, or with both Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability."
11. Thus, in order to ascertain whether the accused has committed an offence u/s 138 NI Act, the following ingredients constituting the offence have to be proved:
(a) The drawer of the cheque should have issued the cheque for the discharge, in whole or in part of a legally enforceable debt or other liability.
(b) The cheque 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.
(c) The drawer of such cheque fails to make the payment of the said amount of money within fifteen days of the receipt of the notice from the payee or the holder in due course demanding the payment of the said amount of money.
It is only when all the above mentioned ingredients are satisfied that the person who has drawn the cheque can be set to have committed an offence u/s 138 NI Act.
12. Section 138 NI Act has to be read with the legal presumptions u/s 139 and 118 NI Act in favour of the payee or holder in due course.
CC no. 6608/2016 Rishabh Rustagi v Alkshendra Chauhan Page no.7 /14 The said sections are reproduced below:
"139. Presumption in favour of holder It shall be presumed, unless the Contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, or any debt or other liability."
"118. Presumptions as to negotiable instruments of consideration Until the contrary is proved, the following presumptions shall be made:
(a) Of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has bee accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.
(b) As to date that every negotiable instrument bearing a date was made or drawn on such date;..............."
13. These presumptions in favour or complainant are rebuttable in nature and it is no more res integra that the burden lies on the shoulder of the accused to rebut the same. It is now well established that the accused can prove the non-existence of any debt or any other liability by raising a probable defence or by demolishing or discrediting the case of the complainant in cross- examination of witness adduced by the complainant. It is not necessary for the accused to lead direct evidence to rebut the presumptions. He may do so by showing CC no. 6608/2016 Rishabh Rustagi v Alkshendra Chauhan Page no.8 /14 preponderence of probabilities and that may be by relying upon the circumstances on record.
14. The Hon'ble Apex Court in M.S. Narayana Menon Vs. State of Kerala, (2006) 6 SCC 39 laid down the law in the given terms:
"For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. This Court, therefore, clearly opined that it is not necessary for the defendant to disprove the existence of consideration by way of direct evidence. The standard of proof evidently is pre-ponderance of probabilities. Inference of pre-ponderance of probabilities can be drawn not only from the materials on records but also by reference to the circumstances upon which he relies."
15. The Apex Court also clarified that the standard of proof is not as heavy as that of prosecution, which is to prove the guilt beyond reasonable doubts but the one upon the accused is only mere preponderance of probabilities. The observations made in K. Prakashan vs P. K. Surenderan, (2008) 1 SCC 258 are as follows:
"It is furthermore not in doubt or dispute that whereas the standard of proof so far as the prosecution is concerned is proof of guilt beyond all reasonable doubt; the one on the accused is only mere preponderance of probability".
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16. Now coming to the factual matrix of the present case, this complaint has been filed by the complainant against accused on the allegations that the complainant had advanced a friendly loan of Rs. 1 lakh to the accused and that the accused in discharge of a legally enforceable liability had issued cheque bearing no. 003720 dated 10.05.2015 for Rs.106083 drawn on Yes Bank, Delhi in favour of the complainant. However, the aforesaid cheque was dishonoured on presentation. Despite service of legal notice, the accused did not pay the cheque amount to the complainant and thus committed the offence u/s 138 NI Act.
17. The accused has assailed the present complaint and has pleaded that he never took any loan from the complainant. He stated that he never issued the cheque in question to the complainant and the same was misplaced from his office. The accused was also stated that the account was closed by him when he came to know that the cheque has been misplaced and that he had made a complaint to the Bank in this respect. It is observed here that the accused has not denied the signatures on the cheque in the statement recorded under Section 313 CrPC. In such circumstances, the statutory presumption u/s 118 Indian Evidence Act and Section 139 NI Act is raised in favour of the complainant and the complainant has been able to prove that the cheques in question were given by the accused for a legally recoverable debt or liability. The CC no. 6608/2016 Rishabh Rustagi v Alkshendra Chauhan Page no.10 /14 onus of proof thereafter shifts on the accused to rebut the presumption. The accused can rebut this presumption either by bringing out contradictions in the evidence led by the complainant or by leading his own evidence.
18. Before delving into the merits of the present case, at the outset, it is observed by the Court that the present complaint case has been filed with respect to dishonor of cheque issued by the accused Alkashendra Chauhan in the capacity of being Director of M/s Ratoid. A perusal of the cheque in question also shows that it has been issued by the accused being AR of Ratoid. Therefore, it was essential that the company be arraigned as an accused before the directors could be made party to the case. Section 141 NI Act also states that 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. Therefore, Section 141 NI Act also treats the company as a separate entity from its directors implying that it needs to be impleaded as a separate party in the complaint. However, the company has not been arrayed as an accused person as per the complaint in the instant case. The Hon'ble Supreme Court in the case titled as "Aneeta Hada vs M/s Godfather Travels & Tours CC no. 6608/2016 Rishabh Rustagi v Alkshendra Chauhan Page no.11 /14 (Criminal Appeal No. 842 of 2008 with Criminal Appeal no. 1483 of 2009) has held the following:
"42...........Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words "as well as the company" appearing in the Section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a director is indicted.
43. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself."
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19. Therefore, the Hon'ble Supreme Court of India in the aforementioned case has clearly held that for a it is imperative for a company to be arrayed separately as an accused for a complaint to be maintainable u/s 138 NI Act. The same view has also been subsequently upheld by the Hon'ble Supreme Court in Standard Chartered Bank vs. State of Maharashtra and others etc., 2016(2) RCR (Criminal) 778 (SC).
20. In the present case there is no doubt that the accused was running a company and that he issued the cheque in question as director of company as it has been stated by the complainant himself in the complaint as well as the memo of parties that the accused is director of Ratoid company. Further, in the cross-examination of the complainant also the Ld. Counsel for the accused has questioned the complainant on the issue that whether he has placed on record any document to show that the accused is running a company in the name and style of M/s Ratoid, to which the complainant has answered that it is correct that he has not placed on record any document to show that the accused is running a company in the name and style of M/s Ratoid. Therefore, making it quite clear that infact the cheque was issued by the company, M/s Ratoid, which unfortunately has not been made a party to the present case.
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21. Hence, in view of the findings of the Hon'ble Supreme Court in the case of Aneeta Hada vs. M/S Godfather Travels & Tours and Standard Chartered Bank vs. State of Maharashtra and others etc., 2016(2) RCR (Criminal) 778 (SC) as discussed hereinbefore, the present complaint case u/s 138 NI Act cannot succeed without arraying of the company as a separate party on whose behalf the cheque in question had been issued by the authorized signatory. Th liability of the directors of a company flows from the liability of the company itself and when the company has not only been made a party to a case, the directors cannot be held liable for the acts of the company.
22. As the present complaint cannot succeed without impleading the company as a party, the court finds no reason to discuss the present case on merits. Accordingly, this Court exonerates the accused Alkshendra Chauhan for the offence under section 138 NI Act. The accused is hereby acquitted. Bail bonds are cancelled and sureties stand discharged. Endorsement, if any, stands cancelled.
Announced in open Court on 19th April, 2022 (MANSI MALIK) Metropolitan Magistrate-03, North-West, Rohini Courts, Delhi CC no. 6608/2016 Rishabh Rustagi v Alkshendra Chauhan Page no.14 /14