Delhi District Court
Y.R. Crafts vs Rakesh Kilam on 30 March, 2024
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
IN THE COURT OF MS POOJA YADAV,
METROPOLITAN MAGISTRATE (NI ACT),
KARKARDOOMA COURTS, East, DELHI
Y.R. Crafts Vs. Rakesh Kilam
CC NO. 58105/2016 [New Ashok Nagar]
CNR No. DLET020046682016
Y.R. Crafts
Through Mrs. Phoola Kaul Kilam
C/o C-17, Sector-65, District Gautam Budh Nagar
Uttar Pradesh- 201301
Also, at:
C-213, Greater Kailash-1,
New Delhi-110 048 ...............Complainant
Vs.
Sh. Rakesh Kilam
S/o Sh. Prannath Kilam
R/o 61-A, Leiah Apartments,
Vasundhara Enclave,
New Delhi ....................Accused
Complaint Case No. : 58105/2016
Date of Institution : 19.05.2016
Offence alleged : Section 138 Negotiable Instruments
Act, 1881.
Plea of the Accused : Pleaded not guilty.
Final Order : CONVICTION
Date of reservation : 30.03.2024
Date of Decision : 30.03.2024
Argued by:
Sh. R. K. Sahni, Ld. Counsel for Complainant.
Sh. Danish Aftab Chowdhury, Ld. Counsel for Accused.
Digitally
signed by
POOJA
POOJA YADAV
YADAV Date:
2024.03.30
18:04:48
+0530
Page no.1 of 31
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
JUDGEMENT
1. The Complainant has filed the present Complaint against the Accused under section 138 Negotiable Instruments Act, 1881.
FACTUAL MATRIX
2. The present complaint has been filed by a registered partnership firm namely Y. R. Crafts (hereinafter called as 'the Complainant firm') which is being represented by its partner Mrs. Phoola Kaul Kilam (hereinafter called as 'the Complainant') against Sh. Rakesh Kilam (hereinafter referred to as 'the Accused'). It is alleged in the complaint that considering the family relations, the Accused was appointed as the General Manager of the Complainant firm and was running day to day affairs of the firm. It is averred in the complaint that during the audit of the Complainant firm conducted on and around 22.01.2016, it was found that certain bogus entries were made in cash books, tally entries and cheque folios of Complainant firm. Thereafter, on 01.02.2016 and subsequently on 14.02.2016, partners of the complainant firm confronted the Accused regarding the above-said false entries to which the Accused confessed of having committed fraudulent acts of tampering the account and promised to return the money to the Complainant firm. To discharge the said liability, the Accused issued 4 cheques (including the cheque in question) which on presentation got dishonoured vide it's return memo for the reason "funds insufficient and Payment Stopped by Drawer" which constrained the complainant to issue the legal demand notice which was duly served upon the Accused. Despite that, the Accused failed to make the payment within 15 days of the service of the legal Digitally signed demand notice. POOJA by POOJA YADAV Date:
YADAV 2024.03.30 18:04:55 +0530 Page no.2 of 31 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar
3. Hence, the present Complaint u/s 138 Negotiable Instrument Act 1881 (for short "the NI Act") was filed by the Complainant, praying for the Accused to be summoned, tried and punished for commission of the offence u/s 138 of the Negotiable Instruments Act. The Complainant has further averred that the matter falls within the territorial jurisdiction of this Court; thus, being tenable at law.
PROCEEDINGS BEFORE THE COURT PRE-SUMMONING EVIDENCE:
4. That in order to prove a prima-facie case, the Complainant led pre-summoning evidence by way of affidavit i.e., Ex. CW-1/1 on 19.05.2016 wherein the Complainant affirmed the facts stated in the present complaint and relied upon the following documents:
i. Ex. CW 1/1: Evidence by way of affidavit. ii. Ex. CW 1/A: Complaint filed by the Complainant. iii. Ex. CW 1/B1: Partnership Deed. iv. Ex.CW1/B2: Reconstituted Partnership Deed dt.
31.03.2015.
v. Ex. CW1/C1: Form no. 1 vi. Ex. CW1/C2: Certificate Registration vii. Ex. CW1/D: Ledger Account Statement. viii. Ex. CW1/E1: First page of confession letter written by the Accused.
ix. Ex. CW1/E2: Second page of confession letter written by the Accused.
x. Ex. CW1/F: Cheque in question, bearing no. 007587, dt.
01.02.2016 for a sum of Rs. 6,00,000/- drawn on Axis Bank Ltd. Mayur Vihar, New Delhi-110 096. xi. Ex. CW1/G: Return memo dt. '21st March' qua cheque in question with remarks Payment stopped by drawer & Funds insufficient.
xii. Ex. CW1/H: Legal demand Notice dated 01.04.2016. xiii. Ex. CW1/I to Ex. CW1/J: Postal Receipts. xiv. Ex. CW1/K to Ex. CW1/L: Tracking report.
Digitally signedPOOJA by POOJA YADAV YADAV Date:
2024.03.30 18:05:02 +0530 Page no.3 of 31 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar COGNIZANCE & SUMMONING OF THE ACCUSED:
5. That, after considering the Pre-summoning evidence led by the Complainant and the submissions made by him, the Court took cognizance and issued summons to the Accused vide order dated 19.05.2016.
6. The Accused appeared before this court on 26.07.2016. He was then admitted to bail on furnishing bail bonds in the sum of Rs. 50,000/- with a surety in like amount. Bail bonds were furnished and accepted.
7. Thereafter, the matter was referred to mediation however, it returned unsettled. Thus, the notice of accusation u/s 251 Cr.P.C. was served upon the Accused on 08.11.2016.
NOTICE U/S- 251 CR.P.C:
8. That on 08.11.2016, Notice u/s- 251 of the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.') containing the substance of accusation, for the offence under Section 138 of the Act was served upon the Accused to which he pleaded not guilty and claimed trial. The Accused admitted that the cheque in question bears his signature, name of his bank and his account number, however, denied filling the body of the cheque in question. He admitted that he received the legal demand notice issued by the Complainant and replied to the same. In his defence, he stated that he knows the Complainant firm as he was working with the complainant firm though he had left his job, and the firm owes him his dues. He further stated that he has not misappropriated any of the funds of the Complainant firm. It was further stated that his several signed cheques were kept in the office of the Complainant firm including the cheque in question which have been misused by Digitally signed by POOJA POOJA YADAV YADAV Date:
2024.03.30 Page no.4 of 31 18:05:12 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar the Complainant firm by filing the present complaint. Thus, he denied any liability towards the complainant firm whatsoever.
EVIDENCE OF THE COMPLAINANT:
9. That since no application u/s 145(2) NI Act was moved despite opportunities after the notice u/s -251 Cr.P.C containing the substance of accusation was served upon the Accused, matter was fixed for defence evidence (DE) in view of the judgment titled as 'Rajesh Aggarwal Vs. State'. However, later, an application u/s 145(2) NI Act read with section 311 Cr.P.C. was moved on behalf of Accused seeking permission to cross-
examine the Complainant, which was allowed considering the plea of defence of the Accused and thus, an opportunity was given to the Accused to cross-examine the Complainant and accordingly, the case proceeded to the stage of CE. The Complainant was then examined as CW-1 on 07.02.2019, who adopted her pre-summoning evidence as post-summoning evidence as it is including the documents and was partly cross- examined on that day. The Complainant i.e., CW-1 was then further cross examined on 18.04.2019 and 22.08.2022. Thereafter, despite opportunities, evidence affidavit of CW-2, Ms. Krupa Kilam was not filed and thus, the said witness was dropped vide order dt. 22.07.2022 and finally, the CW-1 was discharged on 22.08.2022 at the culmination of the cross- examination and since no other witness was examined, CE stood closed. That being the case, the matter was then listed for statement of the Accused u/s 313 Cr.P.C read with Section 281 Cr.P.C.
STATEMENT OF THE ACCUSED:
10. That in order to give an opportunity to the Accused to personally explain all the incriminating circumstances Digitally signed POOJA by POOJA YADAV Page no.5 of 31 YADAV 2024.03.30 Date:
18:05:21 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar appearing in evidence against him, statement of the Accused under Section 313 Cr.P.C read with Section 281 Cr.P.C was recorded on 13.09.2022 without oath wherein all the incriminating circumstances appearing in evidence against the Accused were put to him. The Accused admitted having received the legal demand notice and further stated that he replied to the same. He denied having handed over the cheque in question to the Complainant. In his defence, he stated that he was the employee in complainant partnership firm on salary and profit basis. He used to supervise all the affairs of the partnership firm on behalf of his aunty, Mrs. Phoola Kaul Kilam as she was one of the partners in the firm. He used to travel outside Delhi for business purposes and his blank signed cheque leaves used to be kept in the office with instructions to the accountant of the partnership firm to use the same after filling the particulars for making payment to the vendors qua any transaction made pursuant to the business of the complainant partnership firm. It was further stated that perhaps the cheques in question were stolen from the office and have been misused. The Accused opted to lead defence evidence, thus, the matter was listed for defence evidence.
DEFENCE EVIDENCE:
11. The Accused himself entered the witness box as DW-1 and was partly examined in chief on 22.12.2022. In his examination in chief, he produced bank statement of his personal bank account maintained with Axis Bank which was exhibited as Ex. DW1/1 and some of the transactions were marked therein for instance, Mark A with respect to salary, Mark A1 i.e., five (5) entries of Rs. 5,000/- each with respect to expenses incurred in the construction of house of Sh. Sunil Kilam, Mark Digitally signed by POOJA POOJA YADAV Page no.6 of 31 YADAV Date:
2024.03.30 18:05:30 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar A2 with respect to payment of Diesel, Mark A3 with respect to payment of First Aid Medicine Box, Mark A4 with respect to payment of TDS, Mark A5 with respect to payment of electricity bills, Mark A6 with respect to the PF contribution; as the Complainant firm did not have any account with the facility of RTGS and thus, the Accused used to make such above-said payments through his account. He was further examined in chief on 04.02.2023 when he produced allegedly reply given by him to the legal demand notice issued by the Complainant which was exhibited as Ex. DW1/2. Thereafter, the Accused was cross-examined on 01.08.2023, he was further cross- examined on 12.12.2023. On 12.12.2023, the Accused was confronted with one document i.e., certified copy of the FIR number 0159/17 u/s 420/406 IPC dt. 31.01.2017 registered with PS NOIDA, Phase-III, Gautam Budh Nagar, NOIDA, UP. The said document was exhibited as Ex. DW1/DX1 wherein the name and particulars of the Accused in copy of the said FIR were marked as Mark X1 to X2. The Accused was then discharged on 12.12.2023. Since no other witness was examined on behalf of the Accused, defence evidence (DE) stood closed. That being the case, the matter was then listed for final arguments.
FINAL ARGUMENTS:
12. Oral arguments were made on behalf of both the parties.
Written submissions as well were filed on behalf of the Accused which were duly taken on record.
13. Primarily, it was inter-alia submitted by Ld. Counsel for the Complainant that the Accused tampered with the accounts of the complainant firm by making bogus entries which got revealed on audit of the complainant firm. Thereafter, the Digitally signed by POOJA POOJA YADAV YADAV Date:
2024.03.30 18:05:37 Page no.7 of 31 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar Accused was confronted by the partners of the complainant firm to which the Accused confessed of having committed fraudulent acts of making bogus entries and promised to return the amount towards which the cheque in question was issued alongwith certain other cheques. Ld. counsel for Complainant relied upon the confession letter given by the Accused in his own handwriting wherein he has confessed his fraudulent acts and issued the cheques and also undertook to remain available for reconciliation in case any discrepancy would be found and also gave a cheque as security, however, he did not turn up over reconciliation of the accounts which constrained the Complainant to present all the cheques including the said cheque of Rs. 30 lakhs which was given as security cheque. Since, presumption has arisen in favour of the Complainant as the Accused admitted his signature on the cheque in question, the Accused has failed to rebut the same. Thus, the Accused be convicted for the offence u/s-138 NI Act. The submissions made on behalf of the Complainant cited legal precedents for support, specifically referring to Bir Singh v. Mukesh Kumar (2019) 4 SCC 197, Vijay Ahuja v. State of NCT of Delhi and Anr. 2018 SCC OnLine Del 10029, V.S.Yadav v. Reena CRL. A.No. 1136 of 2010 of Hon'ble Delhi High Court decided on 21.10.2010.
14. On the contrary, Ld. counsel for Accused has inter-alia submitted that the purported confession letter upon which the Complainant has heavily relied upon, has not been proved by the Complainant in conformity with the rules of evidence as applicable to prove the document. Further, it was argued that no accountant or CA was ever examined to prove the alleged audit report which is again unsupported by any certificate u/s-
Digitally
signed by
POOJA POOJA YADAV
Date:
YADAV 2024.03.30
Page no.8 of 31 18:05:44
+0530
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
65B Indian Evidence which is mandatory, and the ledger produced by the Complainant is not enough to fasten liability upon the Accused unless corroborated with independent witness or entries. Accordingly, it was argued that the Complainant has failed to prove his case and thus, the Accused be acquitted, and this complaint be dismissed. The submissions made on behalf of the Accused person cited legal precedents for support, specifically referring to Basalingappa v. Mudibasappa, (2019) 5 SCC 418, M/S Kumar Exports v/s. M/S Sharma Carpets AIR 2009 SUPREME COURT 1518, L.K.Advani vs. Central Bureau of Investigation 1997CRILJ2559, Ravinder Singh @ Kaku v. State of Punjab Criminal Appeal No. 1307 of 2019 passed by the Hon'ble Supreme Court on 04.05.2022.
15. I have carefully considered the submissions made on behalf of the Complainant as well as the Accused. Additionally, I have meticulously reviewed the entire case record, including the written submissions filed by the Accused and the legal authorities cited by both the parties.
16. While the judgments cited by the Accused person do provide relevant legal context, they are factually distinguishable from the present case as discussed in later part of this judgement. Nonetheless, I have remained cognizant of the legal principles established in these judgments while making my decision in the current matter.
LEGAL POSITION:
17. In order to constitute an offence u/s.138 of the Negotiable Instruments Act, 1881, the following legal requirements must Digitally signed by POOJA POOJA YADAV YADAV Date:
2024.03.30 18:05:54 +0530 Page no.9 of 31 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar be satisfied from the averments in the Complaint as well as the evidence of the Complainant1: -
(a) 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 for the discharge, in whole or in part, of any legally enforceable debt or other liability;
(b) that the cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(c) that the cheque has been returned by the drawee bank unpaid, either for the reason that 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;
(d) that the payee or the holder in due course of the cheque has made a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information from the bank regarding the return of the cheque as unpaid;
(e) that the drawer of such cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of receipt of the said notice.
1 Kusum Ingots & Alloys Ltd. Vs. Pennar Peterson Securities Ltd. AIR 2000 SC 954, Delivered by Honorable Division Bench of Justice K.T.Thomas & Justice D.P.Mohapatra, Supreme Court of India on 30-03-2011.*modified in consonance with the amendments brought subsequent to the judgement dated 23.02.2000 in the NI Act.
Digitally signed by POOJA POOJA Date:
YADAV YADAV 18:06:03 2024.03.30 Page no.10 of 31 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar
18. This position has been further fortified in a recent judgement titled as Rajesh Jain v. Ajay Singh, SLP Crl. No. 12802 of 2022, by the Apex court.
19. That the legal requirements mentioned hereinabove are cumulative in nature, i.e. only upon fulfilment of all the aforementioned ingredients, the drawer of the cheque is deemed to have committed an offence under s. 138 of the Negotiable Instruments Act.
20. The provision of Sec.138 is further supported by Sec.139 and Sec.118 of the Act. Sec. 139 of the Act provides presumption in favour of the Complainant and mandates that the court shall presume, that the holder of a cheque received the cheque of the nature referred to in Sec.138 for the discharge, wholly or in part of any debt or other liability. Sec.118 of the Act provides presumptions as to negotiable instruments; that the court shall presume, until the contrary is proved, that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
21. Elaborating further on this point, the Apex Court in Basalingappa v. Mudibasappa2 summarised the law. The following was laid down in para 25: (SCC p. 433-434) "25. We have noticed the ratio laid down by this Court in the above cases on sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
25.1. Once the execution of cheque is admitted section 139 of the Act mandates a presumption
2 (2019) 5 SCC 418; Delivered by Honorable Division Bench of Justice Ashok Bhushan & Justice K.M.Joseph, Supreme Court of India on 09-04-2019.
Digitally
signed by
POOJA
POOJA YADAV
Page no.11 of 31 YADAV Date:
2024.03.30
18:06:11
+0530
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
that the cheque was for the discharge of any debt or other liability.
25.2 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. 25.3 To rebut the presumption, it is open for the Accused to rely on evidence led by him or the 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 the parties but also by reference to the circumstances upon which they rely.
25.4 That it is not necessary for the Accused to come in the witness box in support of his defence, section 139 imposed an evidentiary burden and not a persuasive burden.
25.5 It is not necessary for the Accused to come in the witness box to support his defence.
22. What emerges from the abovesaid discussion is that the offence u/s 138 of the Negotiable Instruments Act operates on reverse onus of proof theory; once a given set of facts are shown to exist, the presumptions u/s 139 and Sec.118 of the Act mandate the court to draw them. The same is evident by the language used, i.e., "Shall Presume". However, the said presumptions are in the nature of rebuttable presumptions, i.e. it is open for the defence to shift the onus on the Complainant by raising a probable/ plausible defence.
Digitally
signed by
POOJA
POOJA YADAV
YADAV Date:
2024.03.30
18:06:20
+0530
Page no.12 of 31
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
APPRECIATION OF EVIDENCE AND FINDINGS:
23. I shall now proceed to analyse the legal elements involved in this case, evaluating whether the oral and documentary evidence satisfy the legal requirements. To streamline the discussion, it is important to distinguish between contested and admitted issues, thus narrowing the scope of the controversy.
24. Concerning ingredients no. two and three, these are evidently satisfied by examination of the disputed cheque (Ex. CW1/F) dated 01.02.2016 for Rs. 6,00,000/- and it's return memo (Ex. CW1/G) dated 21st March indicating "Funds Insufficient and Payment stopped by drawer." The defense has presented no contrary evidence; hence, these ingredients stand established against the Accused.
25. That it is a trite law that in order to maintain a complaint u/s-
138 NI Act, serving of legal demand notice to the Accused before filing the case is imperative. As regards the service of legal demand notice, the Complainant has dispatched the same, Ex. CW1/H dt. 01.04.2016 to the Accused. Original postal receipts (Ex. CW1/I to CW1/J) and tracking report (Ex. CW1/K to CW1/L) corroborate this.
26. That Section 27 of the General Clauses Act, 1897, and section 114 of the Indian Evidence Act, 1872, support the presumption of effective service when a document is sent by registered post unless proven otherwise. The Accused in his notice u/s-251 Cr.P.C as well as in his statement u/s-313 Cr.P.C read with Sec-281 Cr.P.C that he received the legal demand notice issued by the Complainant and replied to the same. Consequently, the Accused has not successfully rebutted the presumption of service of the legal demand notice. Resultantly, the fourth ingredient stands fulfilled as against the Accused.
Digitally
signed by
POOJA
POOJA YADAV
YADAV Date:
2024.03.30
18:06:29
Page no.13 of 31 +0530
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
27. The fifth ingredient also stands satisfied against the Accused as in the instant case, it is an admitted position that the Accused has failed to pay the amount due under the cheque in question, on the ground that he does not owe any liability towards the Complainant.
28. In view of the above, the only point for determination in the present matter remains is that of existence of legally enforceable debt or liability for which the cheque in question was issued by the Accused, i.e., the first ingredient.
29. At the outset, the alleged liability of the Accused stems from the issuance of the cheques including the cheque in question, allegedly issued to the Complainant in discharge of his legal liability i.e., towards the partial payment of money embezzled by him pursuant to having confessed about the embezzlement on confrontation. It is pertinent to note that the Accused has admitted the authenticity of his signature on the cheque in question in his notice of accusation. He denied filling the body of the cheque in question. In a recent judgement titled as Rajesh Jain v. Ajay Singh, SLP Crl. No. 12802 of 2022, the Apex court held as following:
"......37. Recently, this Court has gone to the extent of holding that presumption takes effect even in a situation where the Accused contends that 'a blank cheque leaf was voluntarily signed and handed over by him to the Complainant. [Bir Singh v. Mukesh Kumar3]. Therefore, mere admission of the drawer's signature, without admitting the execution of the Digitally signed by POOJA 3 (2019) 4 SCC 197 POOJA YADAV YADAV Date:
2024.03.30 18:06:51 +0530 Page no.14 of 31 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar entire contents in the cheque, is now sufficient to trigger the presumption."
30. Applying the ratio of the above-said judgement, the undisputed execution of the cheque in question and the legal principles previously discussed leads to an inference under Section 139 read with Section 118 of the Act. This presumption suggests that the cheque was issued for settling a legally enforceable debt or liability owed to the Complainant. With this presumption raised against the Accused, the onus shifts to him to counteract it by presenting a plausible defense. To this end, the Accused has conducted cross-examination of the Complainant, referred to as CW-1. Additionally, the Accused testified as DW-1 in his defense. The fundamental issue to be addressed is whether the Accused has effectively put forward a credible defense to overturn the presumption against him.
31. The only consistent stance maintained by the Accused in his defence is that he knows the Complainant and was working with the Complainant firm on salary and profit-sharing basis. Otherwise, his version has varied at different stages. In notice u/s-251 Cr.P.C, it was taken as defence that he had left the job and the Complainant firm owed his dues. He never misappropriated the funds, his blank signed cheques used to be kept in office including the cheque in question which has been misused by the Complainant.
32. In application u/s-145(2) NI Act read with Sec-311 Cr.P.C moved on behalf of the Accused, it is stated that the Accused owes no legal debt to the Complainant and the instant complaint has been filed on the basis of security cheques which were lying with the Complainant and the Accused has already discharged all his liabilities towards the Complainant Digitally signed by POOJA POOJA YADAV Page no.15 of 31 YADAV Date:
2024.03.30 18:06:58 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar and as on that date, nothing was due and payable by the Accused.
33. In his statement u/s-313 read with sec-281 Cr.P.C, it was stated by the Accused that he used to supervise all the work of the Complainant firm on behalf of his Aunty, Mrs. Phoola Kaul Kilam and since he used to travel out of Delhi for business purposes, he had kept several blank signed cheques in his office with instructions to the Accountant to use those cheques after filling the amount for the purpose of making payment to the vendors with whom the Complainant firm had business transaction(s) and it was asserted that cheques had been perhaps stolen from the office and have been misused by the Complainant.
34. When the Accused entered the witness box as DW-1, he again asserted the stance taken by him in his notice u/s-251 Cr.P.C and in his statement u/s-313 Cr.P.C read with sec-281 Cr.P.C though he did not depose herein that the cheque in question might have been stolen. Further, he deposed that since he was hired on salary and profit-sharing basis, he demanded the profit as he was only being paid salary and that led to altercation between him and Sh. Sunil Kilam and his wife (other partners of the Complainant firm). They immediately sacked him and he left the office premises leaving behind all his belongings and never visited the office again. He received message few months thereafter from the bank about dishonoring of the cheque in question which was to his utter surprise as he had never issued any cheque and thus, he called his banker to stop payment as well and also called his Aunty, Mrs. Phoola Kaul Kilam to enquire about as to why the cheques have been misused. He further deposed that he had replied to the legal demand notice issued by the Complainant.
Digitally signed by POOJA POOJA YADAV YADAV Date:
2024.03.30 Page no.16 of 31 18:07:05 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar
35. In purported reply sent to the Complainant in response to the statutory legal demand notice, the defence was taken that the Complainant managed to obtain four post dated cheques 14 days after illegal termination of the Accused from job on 14.02.2016 and misused those cheques.
36. Briefly, it is the case of the Complainant that the Accused embezzled funds of the Complainant partnership firm by making bogus entries in the statement etc. which was exposed during auditing and when he was confronted for the same, he gave one handwritten letter and issued four cheques (including cheque in question); one cheque was given as security to ensure that the Accused would turn up for reconciliation of accounts, however, since, he did not adhere to his undertaking, all the cheques including the security cheque were presented, which got dishonored.
37. It is an admitted position that the Accused and the Complainant are relatives. It also remains undisputed that the Accused was appointed as General Manager of the Complainant firm. The Complainant deposed in her cross- examination that the Accused had taken various cheques from her on the pretext of making payment to the vendors with whom business transactions had occurred. However, she came to know about their encashment amounting to more than Rs.1,00,00,000/- in and around year 2015, when some vendors complained to her that they were not receiving any money/ payment from her firm. She further deposed that there was a practice of conducting regular annual audits in the firm and such audit was conducted on 22.01.2016 by Ms. V.K.Sumbli, Chartered Accountant of the firm. However, she had got suspicious of embezzlement of funds even before the audit was conducted and thus, in January 2016 she Digitally signed by POOJA POOJA YADAV Page no.17 of 31 YADAV Date:
2024.03.30 18:07:12 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar confronted the Accused with the audit report in front of her son and daughter in law and the accountant and other staffs whose name she did not remember at that time. Four complaint cases have been filed and it was voluntarily stated that one more cheque of Rs.30,00,000/- was to be given by the Accused which was not been given till then. For corroborating the complaint, consistent testimony regarding the key elements of the transaction with the Accused is essential to be provided by CW-1 (the Complainant) and in the instant case, nothing could be elicited from the Complainant during cross- examination that could significantly undermine the reliability of the Complainant or impeach the credibility of her deposition as she withstood the extensive cross-examination.
38. The Accused has maintained throughout the trial that he was hired on salary as well as profit basis and since his dues were not given on account of profits accrued to the Complainant firm and for the same when he confronted the partners, he was terminated. It is pertinent to note that in notice u/s-251 Cr.P.C, the Accused had stated that he left his job, and as DW- 1, he deposed that he was sacked from his job owing to altercation which occurred on demand of profits as mentioned above. Later, in cross-examination, he stated that he was never terminated and he left his job on his own. His stance qua as to whether he left the job on his own or he was sacked from his job has remained contradictory throughout which may not appear to be significant, however, considering the other contradictions to be discussed below, it certainly undermines his reliability.
39. Further, the Accused has not produced any evidence either oral or written to substantiate his claim that he was entitled to profits as well besides his salary as it is an admitted position Digitally signed by POOJA POOJA YADAV Page no.18 of 31 YADAV Date:
2024.03.30 18:07:19 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar that there was no appointment letter since the parties were relatives, and there was not even any agreement for sharing of profit. In cross-examination, the Accused was asked whether he ever sent any written demand for profits after he left the firm, to which, he replied in negative though he stated that he made the demand to seek dues accrued on account of profit through phone calls.
40. It is also admitted by the Accused that he did not make any complaint to the police regarding misuse of cheque in question. He voluntary added that he was not aware that theft of his cheques had been committed. Even after receiving the legal demand notice and purportedly, it was replied to also by the Accused, he made no complaint whatsoever against the Complainant alleging misuse of the cheque in question which does not seem to be natural conduct of any prudent person.
41. Moving ahead, it was deposed by the Accused that the cheque was only signed by him (in contrast to stand taken in purported reply to statutory legal demand notice) and it was blank in all other respect and he stated that he does not know anything about an FIR registered against him by the Complainant. However, when he was confronted with FIR number 0159/17 under section 420/406 IPC dated 31.01.2017 registered at PS NOIDA phase- III, Gautam Budh Nagar, it was then admitted by the Accused that his name and his particulars are mentioned in column no. 7 of the said FIR which was marked as Mark X1 to X2 and the certified copy of the said FIR was exhibited as exhibit DW-1/ DX1. It was further admitted that one person namely Pawan Kumar Jha mentioned at serial number 2 in column number 7 of the said FIR was accountant in the Complainant firm and Ram Ashish Mishra mentioned at serial number 3 in the column number 7 Digitally signed by POOJA POOJA YADAV Page no.19 of 31 YADAV Date:
2024.03.30 18:07:26 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar of the FIR was Data Entry Operator in the Complainant firm (Voluntarily added that the said person has met with his untimely demise) and Arvind Kumar Mishra mentioned at serial number 4 in the column number 7 of the said FIR was Packer in the Complainant firm. The suggestion of having committed a fraud of Rs.1.27 crore in the Complainant firm in connivance with the other Accused persons as mentioned in the above-said FIR and that is the reason why FIR was lodged against him was denied. It is apt to note here that the Accused first tried to portray to be ignorant of any FIR and on confrontation, he admitted about the said factum; this goes on to further erode the credibility of the testimony of the Accused.
42. Ld. Counsel for Accused has argued that since the ledger account/ statement furnished by the Complainant is not supported with certificate u/section 65 B(4) Indian Evidence Act (hereinafter called IEA), the same is not admissible in evidence being electronic record as the same is computer generated and in support of the said argument, the Ld. Counsel has relied upon judgement, Ravinder Singh supra. It was further argued that the Chartered Accountant (CA) who audited the accounts of the Complainant firm was not examined and the entries thereof were not proved by her and in view of section- 34 of IEA, entries in books of accounts are required to be proved independently which has not been done in the present case. In this regard, the Ld. Counsel has placed reliance upon L. K. Advani vs. CBI, supra. Lastly, it was argued that the alleged confession letter dated 14.02.2016 of the Accused has not been duly proved as neither any expert was examined in this regard nor has CW-1 proved the signature of the Accused person. Moreover, it was argued that the said letter bears one more signature of one person at the bottom Digitally signed by POOJA POOJA YADAV YADAV Date:
Page no.20 of 31 2024.03.30
18:07:35
+0530
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
right of the page and the said person has also not been examined.
43. As far as the argument of the Ld. Counsel for the Accused regarding the confessional letter is concerned, it is without merit for the reasons outlined below. The Accused merely denies that Ex. CW-1/E1 and Ex. CW-1/E2 were authored and signed by him. However, a simple denial by the Accused is not sufficient to shift the burden back to the Complainant once it has been asserted on oath by the Complainant that the letter was authored by the Accused. Although Ex. CW-1/E1 and Ex.
CW-1/E2 were not admitted by the Accused but it cannot be said that the said documents are not verified by a person (CW-
1) familiar with his handwriting. Further, the original documents were presented before the Ld. predecessor of the undersigned, who reviewed and returned them. The Complainant, who is a relative of the Accused, is undoubtedly familiar with his signature. Furthermore, close scrutiny of the said documents reveal that the signature of the Accused closely resembles the signature he appended on his notice under section- 251 Cr.P.C and other documents available on record, such as his statement under section-313 read with section- 281 of Cr.P.C, testimony as DW-1, bail bonds, and vakalatnama. There was also no suggestion that Ex. CW-1/E1 and Ex. CW-1/E2 were forged or fabricated.
44. It is significant to note that apart from denying that these documents were authored by him, the Accused did not even suggest to the Complainant in cross-examination that he was never confronted with the audit reports. Instead, during his own cross-examination, he simply stated that he did not remember if an audit was conducted on 22.01.2016, which implicitly acknowledges that an audit took place. Moreover, no Digitally signed by POOJA POOJA YADAV YADAV Date:
Page no.21 of 31 2024.03.30
18:07:42
+0530
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
questions or suggestions were raised about Ex. CW-1/E1 and Ex. CW-1/E2 (the alleged confessional letter) during the cross- examination of the Complainant. Be that as it may, even for the sake of argument, if it is presumed that the said letter is not duly proved, even then, the Accused for the discussion made in the judgment has failed to rebut the presumption of legally enforceable debt or liability arising in favour of the Complainant. Moreso, it is interesting to observe that the Ld. Counsel for Accused relied upon the said letter only to argue that the cheques in question in connected case bearing no. 58104/2016, 58106/2016 and the present case are dated 01.02.2016 and the confessional letter is itself dated 14.02.2016, thus, contradictory and creating doubt on the existence of liability of the Accused and Ld.Counsel for Complainant explained the same that the letter itself says that "As per our understanding dt. 1st Feb 2016 and subsequently our meeting dt. 14th Feb 2016", meaning thereby that the cheques were given earlier to be presented on the dates mentioned in the letter. I find the explanation to be plausible and reasonable coupled with the entire evidence on record.
45. Furthermore, the Accused was asked a specific question that he did not turn up for reconciliation of accounts and to clarify the entries of Rs.60,00,000/- to complete the audit to which he replied that he had gone for reconciliation of accounts. However, he did not remember the date on which he visited the Complainant firm for reconciliation of accounts and clarification of entries qua Rs.60 lakh. This makes it evident and verifies the assertion of the Complainant at least to an extent that reconciliation of account was warranted and for the same, he was required to cooperate and since, it has never ever even been suggested to the Complainant in her cross-
Digitally
signed by
POOJA POOJA YADAV
Page no.22 of 31 Date:
YADAV 2024.03.30
18:07:50
+0530
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
examination that the Accused did not commit any fraud or embezzlement of funds, this inference may be drawn that Accused was to make himself available for reconciliation pursuant to situation and for the purpose claimed by the Complainant, i.e., the Accused had committed fraud and this was once again further fortified when specific question in this regard in her cross examination was asked as to how the liability of the Accused person arose.
46. In defence, the Accused had produced his own account statement in his evidence, Ex.DW-1/2 to show that he used to make payment from his own account on behalf of the Complainant firm, for instance payment qua electricity bills etc. which were marked as Mark A1 to Mark A6. However, when the Accused was confronted with certain entries marked as C1 to C 38 in his own bank account statement, he could not explain those entries which were of big amount like Rs. 8 lakh, 3.1 lakhs etc, amounting to approximately Rs. 55 lakhs. In cross-examination, he was specifically asked as to whether he can produce any bills, credit notes or debit notes qua those entries to substantiate the same to which the answer was in negative. It was voluntarily stated that the bills were in possession of the Complainant firm and since he had left the firm, he could not produce the same. In this regard, it was argued by the Ld.Counsel for Complainant that had the Accused paid any amount on behalf of the firm from his personal bank account then he must have issued debit or credit notes to the Complainant firm to get the same reimbursed. However, the same has not been done in the present case which again indicates that the Accused is concocting the story.
POOJA
YADAV
Digitally signed
by POOJA YADAV
Page no.23 of 31 Date: 2024.03.30
18:08:03 +0530
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
47. The Accused has tried to maintain after he left the office (on his own or being terminated), he never visited it again, leaving all his belongings and has largely answered whenever specifically asked for any document that since he left the office, he has no document in his possession, be it bills etc. or e-mails allegedly through which approval for any expenditure was sought by the Accused from Sh.Sunil Kilam who was staying in USA and his blank signed cheques kept in the office for the purpose of making payment have been stolen by the Complainant and have been misused. These e-mails have also been deleted by the said Sh. Sunil Kilam and thus, could not be produced. This seems to be natural as after having left the job, either on own or on termination, the access to e-mails of the company becomes prohibited. However, it has been rightly argued by the Ld. Counsel for the Complainant that any prudent person and that too on part of the Accused who is a businessman and handling business of crores, does not seem to be prudent and probable to having left the office knowing the consequences of his blank signed cheques kept there which can potentially be misused and despite all that he neither issued any notice nor made any complaint to any authority for the same. He did not even send any notice to the Complainant to procure his belongings nor as admitted by him he ever sent any notice demanding his dues on account of profit accrued to the Complainant firm which has remained the core defence of the Accused. the Accused did not even seek reimbursement of the payments made from his own account allegedly for the expenses of the Complainant firm.
48. Moreover, the defence tried to be set up by the Accused that since he asked for his dues, he was terminated and his cheques have been misused has also not been proved by him Digitally signed by POOJA POOJA YADAV Page no.24 of 31 YADAV Date:
2024.03.30 18:08:14 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar on the touchstone of preponderance of probabilities as it remains mere oral averment, there is no written document in this regard for the discussion made above.
49. As far as the argument that the ledger account /statement of the Complainant cannot be read in evidence as it is not supported by section 65 B(4) IEA is concerned, the said argument has been raised only at the stage of final arguments and throughout the trial not even a whisper of the same was made, not even any suggestion to this effect was given, nevertheless, for the sake of argument only, even if that document is not read, the presumption being in favour of the Complainant coupled with the handwritten letter of the Accused and the infirmities and contradictory stance of the Accused, the Accused has not been able to rebut the presumption. Moreover, it is noteworthy that the bank account statement given by the Accused himself is also not supported with any certificate u/s-65B(4) IEA. Be that as it may, it reflects that he has made certain payment (Mark A1 to Mark A6), however, he could not give any explanation of the entries asked by the Ld. Counsel for Complainant, i.e., C1 to C38. For the sake of arguments, even if it is presumed that since he had left the firm and all the bills etc. were in the possession of the Complainant firm and thus, could not be produced, he never even asked the Complainant to produce the same or gave any notice for the same. It is but natural for any prudent person to seek reimbursement of money paid from his own account for someone else. The Accused has admittedly not demanded the same. He only as per his own testimony demanded his profits that too was an oral demand.
50. It is interesting to note that in application under section-
145(2) NI Act, the Accused maintained that the cheques were Digitally signed by POOJA POOJA YADAV Page no.25 of 31 YADAV Date:
2024.03.30 18:08:23 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar given as security which is in stark contrast to accounts provided by the Accused in his notice u/s-251 Cr.P.C, statement u/s-313 read with sec-281 Cr.P.C and as DW-1 that the cheques were never given as security rather they were misused by the Complainant by stealing them from the office. His own stance has remained contradictory throughout the trial which erodes the credibility of the defence of the Accused. This becomes more prominent in light of the fact that the Accused tried to conceal that he has no knowledge of the FIR registered against him by the Complainant and when he was confronted with the same, he acknowledged and admitted that he along with other three persons have been arrayed as Accused in the FIR for embezzlement of funds. This further casts doubt upon the credibility of the Accused and impeaches his credit.
51. Again, it is interesting to scrutinize the purported reply given by the Accused to the legal demand notice issued by the Complainant. First, the Complainant deposed in her cross- examination that she does not remember whether she ever received any reply (Ex.DW-1/2). It was argued by the Ld.Counsel for Complainant that no such reply was ever sent to the Complainant. No speed post receipt is placed on record in that regard and thus, it has only been fabricated later. There seems to be some merit in the argument of the Complainant. No motive has been attributed to the Complainant as to why the reply to the legal demand notice would not be produced. No notice has ever been given to the Complainant to produce the same as per the provisions of the Indian Evidence Act. No suggestion also has ever been given to the Complainant in her cross-examination in this regard when she stated that she does not remember. Though it is a self-serving document, Digitally signed by POOJA POOJA YADAV YADAV Date:
Page no.26 of 31 2024.03.30
18:08:30
+0530
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
nevertheless, even if it is presumed that the said reply was sent to the Complainant and it was received by her, even then, it further erodes the authenticity of the version of the Accused and adds to the contradictions of the Accused. In that reply, it is stated by the Accused that the Complainant managed to obtain four (4) post dated cheques 14 days after the illegal termination of professional services of the Accused on 01.02.2016 as against blank signed cheques kept in office and the job was left. It is also pertinent to note that here it is claimed that the Complainant managed to obtain as against having stolen the cheques (stated in statement u/s-313 read with sec-281 Cr.P.C and voluntarily stated in cross- examination as DW-1).
52. Mere denial of the case of the Complainant with oral averments, supported by no documents or evidence, leave alone, cogent one is not going to assume any evidentiary value and averments in notice of accusation and in his examination under Sec-313 Cr.P.C read with Sec-281 Cr.P.C would not assume the character of defence evidence4 as mere denial is not sufficient.
53. Even the defense of the cheques in question being security cheques is of no aid to the case of the Accused as it is a well settled position of law that dishonour of cheques which were allegedly given as security cheques would attract the provision of Sec-138 NI Act, when the liability has fallen due and payment has not been made as the same would then be towards the discharge of legal liability or debt. It is trite law that the Accused has to prove that there was no debt or liability towards the Complainant on the day when the cheque(s) in Digitally 4 V.S Yadav v. Reena, CRL. A. No. 1136 Of 2010. signed by POOJA POOJA YADAV YADAV Date:
2024.03.30 18:08:40 +0530 Page no.27 of 31 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar question were presented, mere denial is not sufficient once execution of the cheques have been admitted. Sections-20, 87 and 139 of NI Act when read in harmony, makes it clear that the drawer of the cheques is liable to pay unless the presumption has been rebutted by raising a probable defence and it would make no difference if the particulars of the cheques in question is filled by someone else if the cheques have been duly signed by the Accused. Sec-138 NI Act would be attracted if the cheques are otherwise valid cheques. Accused has not been able to prove for the reasons discussed above that he had no liability towards the Complainant on the day when the cheques in question were presented.
54. In addition to above, on holistic consideration of the record, I find that the case put forth by the Accused is thoroughly filled with contradictions and infirmities. It is apparent on the face of the record that no credibility can be perceived in the defense attempted to be set up by the Accused.
55. When considering these points as outlined, the evidence presented on behalf of the Complainant gains credibility and instils confidence in the Court regarding the material aspects of the Complaint. The narrative of the Complainant remains consistent, coherent and appealing, in stark contrast to the inconsistent and contradictory accounts provided by the Accused.
56. In conclusion, rather than substantiating the defense put forward by the Accused, the evidence and testimony presented have not even succeeded in undermining the case of the Complainant or casting any reasonable doubt upon it. The Accused's admission of his signature on the cheque is pivotal, and when combined with the presumption raised under Sections 118 and 139 of the Negotiable Instruments Act, all Digitally signed by POOJA POOJA YADAV Date:
YADAV 2024.03.30
18:08:48
Page no.28 of 31 +0530
CC No. 58105/2016
Y.R. Crafts Vs. Rakesh Kilam
PS: New Ashok Nagar
the necessary elements of Section 138 of the same Act have been adequately established by the case of the Complainant.
The defense of the Accused was primarily based on the assertion that no legally enforceable liability existed on the date when the cheque in question was presented, arguing at times that the cheque was security cheque and at times that the cheques including the cheque in question were stolen. However, the Accused has failed to meet the burden of proof, failing to provide convincing evidence that tilts the balance of probabilities in his favor. Consequently, the presumption raised against the Accused remains unchallenged and stands firm.
57. The culmination of the above analysis leads to the conclusion that all the essential elements required under Section 138 of the Negotiable Instruments Act are satisfactorily met with respect to the Accused. The case of the Complainant stands on a firm foundation, while the defense of the Accused is riddled with inconsistencies and lacks persuasive evidence, failing to create any reasonable doubt in the version put forth by the Complainant.
58. In the opinion of court, consistency in the testimony of the Complainant especially regarding material transaction aspects, remains unshaken despite cross-examination. Contradictions and inconsistencies mar the defense narrative, particularly the nature of cheque as it is alleged to be given for security [as per application u/s-145(2) NI Act], it was stolen by the Complainant (as per statement u/s-313 Cr.P.C read with sec-281 Cr.P.C and as DW-1), cheques were in blank signed form (throughout the trial) and the Complainant managed to obtain four (4) post-dated cheques (specificity in the number of cheques, date on which the Complainant was able to manage Digitally signed by POOJA POOJA YADAV YADAV Date:
Page no.29 of 31 2024.03.30 18:08:56 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar to obtain such cheques and dates already filled in). Examination of bank statement of the Accused introduces further ambiguities, failing to clarify the flow of funds or establish a credible link to the Complainant. Deliberate feigning of ignorance of the FIR5. An overall assessment of the record reveals contradictions and infirmities in the defense of the Accused, casting doubt on its credibility. The evolving narrative of the Accused under cross-examination, introducing new elements without prior indication, undermines the trustworthiness of his defense. Discrepancies in the statements of the Accused regarding the issuance of the cheque further weaken his position. The failure to establish any connection between the Complainant and alleged theft of the cheque in question, coupled with contradictions in the defense's narrative, fails to substantiate the Accused's claim of no liability.
59. When analysed comprehensively, the evidence led by the Complainant emerges as more credible and consistent, leading to the conclusion that the all legal requirements are met, and the defense of the Accused lacks substantiation.
DECISION
60. In view of the above-discussion, considering all the facts and circumstances, material/ evidence on record, as all the ingredients of the offence have been cumulatively satisfied against the Accused, the Accused, Rakesh Kilam is hereby convicted of the offence u/s 138 of the Negotiable Instruments Act, 1881.
5 Bearing no.159/17, PS: NOIDA, Phase-III, Gautam Budh Nagar, UP, u/s-420/406 IPC Digitally signed by POOJA POOJA YADAV YADAV Date:
2024.03.30 18:09:09 Page no.30 of 31 +0530 CC No. 58105/2016 Y.R. Crafts Vs. Rakesh Kilam PS: New Ashok Nagar ORDER: CONVICTED The judgement has been dictated to Ms. Deepa, PA attached with the undersigned.
This judgment contains 31 / thirty-one signed pages. Announced in open court on 30.03.2024 in the presence Digitally of the Accused. signed by POOJA POOJA YADAV Date:
YADAV 2024.03.30
18:09:18
+0530
(Pooja Yadav)
MM NI Act/ East /KKD Courts/Delhi
30.03.2024
Page no.31 of 31