Delhi District Court
M/S Brawn Biotech Ltd vs Prashant Kumar on 12 March, 2015
IN THE COURT OF BHARAT CHUGH,
METROPOLITAN MAGISTRATE (NI ACT)-1, CENTRAL:
ROOM NO.275, TIS HAZARI COURT COMPLEX, DELHI
M/s Brawn Biotech Ltd.
VERSUS
Prashant Kumar
JUDGMENT
Part A - The lis at a glance A. Serial No. of the Case CC No. 6570/12 B. Date of Commission of the 30.12.2011 offence C. Name of the Complainant M/s Brawn Biotech Limited, 4/4B, Delhi Stock Exchange Building (old), Asaf Ali Road -
110002.
D. Name of Accused person & Prashant Kumar, Proprietor :
his parentage & residence P.K.Pharma, Opp. Sahu Katara, Kamal Market, Gandhi Nagar, Basti, U.P. E. Offence complained of Dishonor of cheque - culpable u/s 138 of the Negotiable Instruments Act.
F. Plea of the accused and his Pleaded not guilty. Disputed
examination (if any) legal liability and also argued
dismissal of complainant on
the ground of him being
neither the drawer of the
cheque in question, nor the
signatory.
G. Final Order Acquitted
H. Judgment reserved on 12.03.2015
I. Judgment pronounced on 12.03.2015.
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Part B - A brief statement of reasons for the decision (As mandated u/s 355(i) of the Code of Criminal Procedure, 1973)
1. Pithily put, the complainant company, having filed the case through its AR, is a manufacturer of pharmaceutical products and had appointed the accused as a Stockist for its products.
During the course of business, products are stated to have been supplied to the accused, in liquidation of which the accused is stated to have issued a cheque bearing No. 503810, dated : 30.09.2011, for Rs. 54,873, drawn on ICICI Bank, Lucknow, to the complainant. This cheque forms the core of this case, and much to the dismay of the complainant, got dishonored on presentation on account of insufficiency of funds. Constraining the complainant to send a legal demand notice to the accused, which when also went unheeded, led to the filing of the present case.
2. Cognizance was taken on the complaint and accused was summoned to face trial for an offence u/s 138 of the N.I.Act. The accused was explained the accusation against him and in his plea of defence recorded at the time of framing of notice u/s 251 of the Cr.P.C, the accused denied being either the signatory or the drawer of the cheque in question. He denied having given such a cheque to the complainant ever. He disputed his legal liability even de hors the cheque and also denied the service of legal notice.
3. On an application filed by the accused u/s 145(2) of the NI Act, the accused was allowed to cross examine the AR of the complainant who had deposed on behalf of the complainant M/s Brawn Biotech Ltd. V. Prashant Kumar Page 2 of 8 and in support of the complainant's case. The AR of the complainant was cross examined first on 03.12.2014 and then again on 12.03.2015. The AR of the complainant made some damaging admissions in his cross examination which completely prove the defence of the accused and put the case beyond the purview of Section 138 of the Negotiable Instruments Act.
4. The AR of the complainant (deposing as CW1) in his cross examination conducted on 03.12.2014, admitted that no enquiries were made by the complainant to ascertain whether the bank account on which the cheque in question is drawn is the bank account of the accused or not. On a suggestion being put that the cheque in question does not pertain to the bank account of the accused and is neither signed by him, the AR of the complainant denied the suggestion. It was borne out of the cross examination of the complainant, that the cheque was not filled in or handed over to the AR of the complainant in his presence, but had been received through their agents from Lucknow. The AR of the complainant, towards the end of his cross examination on that date, conceded that he would have to go through his records to be able to comment on the case better. His cross examination was deferred and he was again cross examined today on 12.03.2015.
5. In his cross examination today on 12.03.2015, the AR of the complainant made a clean breast of things, and quite candidly admitted that the cheque is not drawn on the account of the accused, but that of their ex-employee Mr.Hari Kishan Shukla. In mitigation he deposed that the complainant was in dark about this fact and is at present searching for their ex-
M/s Brawn Biotech Ltd. V. Prashant Kumar Page 3 of 8employee Mr. Hari Kishan Shukla to take the necessary action. The relevant paras from his deposition are being quoted verbatim :-
"After filing of the case, and after the accused took the defence that the cheques in question have not been drawn on his bank account nor signed by him, we made the necessary enquiries and found out that the account on which the cheques in question are drawn do not belong to the accused but belongs to ex-employee Hari Kishan Shukla. It seems that our ex-employee Hari Kishan Shukla had done some foul play and instead of sending the cheques of the accused has given his own cheque signed as Prashant. We did not suspect anything as the cheque bore "for P.K.Pharma". The company is in the process of searching the said ex-employee to take the necessary action against him."
This admission from the horse's mouth itself, is more than sufficient to decide the case. The complainant has clearly admitted its folly whereby the accused has been prosecuted against, whereas he is not the drawer of the cheque in question nor has anything to do with that bank account.
6. At this juncture, it becomes important to recapitulate the language of Section 138 of the NI Act. Section 138 of the Negotiable Instruments Act, reads as under :-
"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 by an agreement made with that bank, such person shall be deemed to have committed M/s Brawn Biotech Ltd. V. Prashant Kumar Page 4 of 8 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.
7. From a perusal of the above, It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;M/s Brawn Biotech Ltd. V. Prashant Kumar Page 5 of 8
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;
Being cumulative, it is only when all the afore- mentioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.
8. Therefore it is clear that the first sine qua non for a prosecution u/s 138 of the NI Act is that accused must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account. In the instant case, it is apparent that the account (on which the cheque is drawn) does not belong to the accused but to the complainant's ex-employee. Therefore, the prosecution cannot sustain. The first ingredient of Section 138 NI Act having remained unsatisfied.
9. Ld.Counsel for the Complainant, in a last ditch effort to salvage his case, has argued that the accused and the ex-employee of the complainant both being sale people based in Lucknow, may have entered into a conspiracy to dupe the complainant and M/s Brawn Biotech Ltd. V. Prashant Kumar Page 6 of 8 may have, acting in consort, given the cheque pertaining to the bank account of the ex-employee, albeit signed by the accused in order to defraud the complainant and prive it of it's legitimate claim.
This argument, though attractive at first blush, is thoroughly misconceived for the simple reason that it is in the realm of doubt as to whether this cheque has been signed by the accused at all. The court cannot go by conjectures and surmises. Even if it is assumed, for the sake of argument, that the accused did infact sign the cheque in question, which undeniably pertains to the account of the ex-employee of the accused. It is trite law that where a cheque is drawn by an accused not from his own bank account but from the account of someone else, then he cannot be held liable for prosecution u/s 138 of the N.I.Act as held by the Hon'ble Supreme Court in Jugesh Sehgal v. Shamsher Singh Gogi, 2009 VII AD (SC) 737, wherein the Supreme Court categorically reiterated that one of the basic ingredients for the offence is that a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account.
10.Therefore it is apparent, in view of the legal position above, that the case has no legs to stand on, therefore, to prevent the needless elongation of an ill-fated case, which in any event suffers from a basic infirmity. Further complainant evidence was closed at the concurrence of the complainant side. In view of the admission of the AR of the complainant, statement of the M/s Brawn Biotech Ltd. V. Prashant Kumar Page 7 of 8 accused u/s 313 of the Cr.P.C was dispensed with, as the material on record totally exculpated the accused and there was no incriminating material against him, which might warrant an explanation. Defence Evidence was also needless as the onus to disprove the commission of the offence never shifted onto the accused in view of fundamental deficiencies within the case of the complainant.
For the foregoing reasons, the accused Prashant Kumar is acquitted of offence u/s 138 of the N.I.Act, the ingredients of offence u/s 138 of the N.I.Act having remained unfulfilled.
A copy of this judgment be placed on the official website of the District Court. Announced in the open court today on 12.03.2015 (Bharat Chugh) MM (NI Act)-01, Central District, Delhi 12.03.2015.
* Judgment contains 8 signed pages.
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