Delhi District Court
Kiran Devi Bansal vs Ihome Infrastructure Pvt Ltd And Ors on 16 December, 2024
IN THE COURT OF SH. SIDDHANT KUMAR,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT)-06,
SOUTH DELHI DISTRICT, SAKET, NEW DELHI
JUDGMENT
DLST020122372019 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors PS : Hauz Khas Kiran Devi Bansal W/o Sh. Nityanand Bansal, R/o F-2, South Extension Part-II, New Delhi-110049 ..............Complainant Versus M/s Ihome and Infrastructure Private Limited Office at A-195/1, Ground Floor, Ashok Vihar Phase-I, New Delhi-110052 .............. Accused No.1 Mr. Ajay Kumar (Director of Accused No.1) Office at KC-69, Ghaziabad, Uttar Pradesh-201001 .............. Accused No.2 Mr. Sanjeev Jain, (Director of Accused No.1) Office at I-56, Phase-I, Ashok Vihar, New Delhi-110052 .............. Accused No.3 Mr. Anil Bansal (Director of Accused No.1) Office at B-135, Sector-44, Noida, Uttar Pradesh Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.12.16 16:41:39 +0530 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.1 of 23 .............. Accused No.4 Mr. Rajendra Kumar Garg Director of Accused No.1) Office at G-80, Ashok Vihar, Phase-1 New Delhi-110052 .............. Accused No.5 Date of registration : 05.04.2019 Date of Judgment : 16.12.2024 Decision : Conviction FACTS
1. The instant proceedings have originated out of a complaint filed by Kiran Devi Bansal against Ihome And Infrastructure Pvt Ltd and Ors for the offense under Section 138, Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act").
2. Brief facts of the complaint are that the complainant advanced a sum of Rs. 9,78,02,364/- to a company known as M/s Majestic Properties Private Ltd. (hereinafter referred to as "Majestic") for a real estate investment project. Majestic had issued allotment letters for 156 units/apartments to the complainant under the project. Subsequently, the accused no.1, a private limited company, entered into a collaboration agreement with Majestic on 12.08.2013, whereby certain rights relating to the development, marketing, and sale of nine towers in the project were transferred to accused no.1. Accused nos. 2 to 5 are directors of accused no.1 company and are stated to be involved in its day-to-day affairs. Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
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3. Out of the 156 flats for which allotment letters were issued to the complainant, 44 flats fell within the towers designated to accused no.1 under the collaboration agreement. The complainant subsequently surrendered/sold 22 of these apartments to accused no.1. Thereafter, accused no.1 entered into an agreement (hereinafter referred to as "buy back agreement") with the complainant, agreeing to buy back the rights of the complainant in the remaining 22 apartments for a consideration of Rs. 3,78,76,866/-. Out of the total consideration, Rs.
18,76,866/- was paid at the time of signing the agreement, and the balance Rs. 3,60,00,000/- was agreed to be paid on or before 31.01.2019. To fulfill this obligation, accused no.1 issued nine post-dated cheques of Rs. 40,00,000/- each, as detailed in the agreement.
4. It was later found that the complainant's name was incorrectly mentioned on the cheques. Consequently, accused no.1 reissued nine post-dated cheques, each for Rs. 40,00,000/-, with the correct name of the complainant. All the cheques were dated 10.02.2019. The complainant presented the cheques for encashment as per the terms of the agreement, but all the cheques were returned unpaid with the remarks "Exceeds Arrangement,"
as per return memos dated 12.02.2019.
5. The complainant sent a statutory demand notice under Section 138 of the Negotiable Instruments Act, 1881, to all the accused on 18.02.2019. The accused duly replied to the notice Digitally signed by SIDDHANT KUMAR SIDDHANT Date: KUMAR 2024.12.16 16:41:47 +0530 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.3 of 23 vide reply dated 10.03.2019 but failed to make payment of the cheque amounts within the statutory period. Consequently, the present complaint was filed under Section 138 of the Negotiable Instruments Act.
6. The complainant has filed three separate complaints under Section 138 of the Negotiable Instruments Act, 1881, each pertaining to three of the nine cheques issued by the accused. As the alleged liability arose out of the same transaction between the same parties, the trial of all three cases was conducted together to ensure consistency in adjudication.
TRIAL
7. In support of their case, the complainant had led pre summoning evidence by way of affidavit i.e. Ex.CW-1/A which reiterated the contents of the complaint. She relied upon the following documents filed alongwith the complaint :
(i) Copy of buy back agreement dated 10.11.2018 as Ex.CW-1/1 (OSR);
(ii) Original cheques in question as Ex.CW-1/2, Ex.CW-1/3 and Ex.CW-1/4;
(iii) Cheque return memos dated 12.02.2019 as Ex.CW-1/5 to Ex.Cw-1/7;
(iv) Legal Notice dated 18.02.2019 as Ex. CW-1/8;
(v) Postal receipts of legal notice as Ex.CW-1/9 (colly);
(vi) Copy of the reply dated 10.03.2019 to the legal notice as Ex.CW-1/10 (colly). Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
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8. Summons were issued to the accused company and its directors on 06.04.2019. The accused persons entered their appearance on 27.06.2019. As the offense is bailable, the accused was granted bail.
9. Substance of accusation/notice u/s 251 Cr.P.C. was served to the accused persons on 03.12.2019 and 21.01.2020. All the accused persons pleaded not guilty. It was admitted that the cheques were issued on behalf of the accused company and bear the signatures of the directors. In their defense, the directors stated that there was a buy back agreement with the complainant pursuant to which the cheques in question were issued towards advance payments. The complainant however did not give them the title deeds of the properties and presented the cheques. The receipt of the legal notice was admitted but the accused persons claimed no legal liability to pay the cheques amount to the complainant.
10. In view of the nature of evidence sought to be brought on record and the allegations made, the trial proceeded as a summons trial. The accused was allowed to cross examine the complainant witness u/s 145 (2) of NI Act.
11. The complainant's husband deposed as the SPA holder through SPA which is Ex.CW-1/B. He was examined as a complainant witness and tendered his evidence by way of affidavit which is Ex.CW-1/A1 which reiterated the contents of Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.12.16 16:41:55 CT Cases 4642/2019 +0530 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.5 of 23 the complaint. CW-1 stated to be privy of the transactions and agreement between the parties. The witness (CW-1) relied upon the documents already exhibited. CW-1 was duly cross examined by Ld. counsel for the accused on 11.08.2023, 8.11.2023, 9.12.2023, 19.01.2024 and 19.03.2024.
12. The witness was asked regarding the disclosure of investment by the complainant in her ITR to which he answered that the complainant had disclosed her investment of Rs. 9,78,02,364/- with Majestic while filing her ITR. The source of her income is rental as well as through Mutual Funds. The witness was personally present while the buy back agreement was executed. He was also aware of the collaboration agreement between the accused company and Majestic. He admitted that the complainant has relinquished her rights in 22 flats out of the 44 flats which came within the purview of the accused company. He answered that it was sold for consideration in the year 2013-14. He admitted that the last date of the balance consideration for the remaining 22 flats (pertaining to the buy back agreement) was 31.01.2019. The witness had answered that each cheque was issued for two flats. Exact particular flat numbers for the cheques in question were not pointed out by the witness. He volunteered that as per the agreement, any 2 of the 22 flats were agreed to be sold (buy Back) in lieu of any of the cheques in question. He further answered that the complainant has not transferred any of the said 22 flats in the name of the accused company on 10.11.2018 when the buy back agreement was executed. He volunteered that as per para 5 of the buy back agreement, if the Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.12.16 CT Cases 4642/2019 16:41:59 +0530 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.6 of 23 accused company had paid Rs. 40 lakhs then he would have released/surrendered the rights in respect of two flats. He answered that no rights were transferred/surrendered in respect of any of the flats by the complainant in the favor of the accused no.1 company despite receiving advance amount of Rs. 18,76,866/- till 10.02.2019. He volunteered that as per the agreement he did not have to surrender any documents for this amount.
13. The witness again answered that the complainant had not transferred the rights of any of the said 22 flats in the name of the accused company on or before 31.01.2019 as no payment was made by the accused company and therefore the complainant did not transfer the rights of any of the said flats. On being questioned regarding what liability existed at the time of presentation of the cheques in question, the witness answered pointing out the liability through the buy back agreement and the accused company handed over the 9 cheques in question to the total amount of Rs. 3.60 crores. After going through the buy back agreement he admitted that with every tranche payment of Rs 40 lakhs by the accused company to the complainant, the complainant was to return one of the nine cheques.
14. The witness answered in affirmative that the occasion to seek fresh PDCs in place of the earlier issued ones arose as per the buy back agreement because the parties had agreed that in case the earlier 9 cheques remained lying with the complainant then then the earlier 9 cheques shall not be presented and Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.12.16 CT Cases 4642/2019 16:42:03 +0530 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.7 of 23 therefore issuance for fresh cheques was envisaged. He also stated that he had asked several times from the accused to issue fresh PDCs with interest. The requests were made orally and through meetings and not in writing. He denied the suggestion that the 9 cheques in question were not meant for presentation as they were security cheques. He also denied the suggestion that he never demanded fresh PDCs from the accused persons as this fact was not mentioned in the statutory demand notice as well as the complaint. He admitted that he had surrendered some of the aforesaid 22 flats allotted to the complainant to adjust the cost of development. After the cross examination of CW-1, CE was closed.
15. Statement u/s 313 CrPC of accused no.1 through its Authorized representative was recorded on 24.04.2024. The statements of the directors were also recorded without oath on 24.04.2024, 30.05.2024 and 06.07.2024. The accused persons reiterated their defense of no liability of the cheque amount. They stated that the cheques were issued as security against the flats which were to be transferred to them in terms of the buy back agreement but the flats were not transferred to them and thus, there is no liability for the cheques in question. Accused no.2, 3, 4 and 5 admitted being the director of the accused company at the relevant period. Accused no.3 stated on 06.07.2024 that he had resigned from the company 2-3 months back.
16. The accused was given opportunity to lead defense evidence and on 06.09.2024, defense evidence was led and the Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.12.16 16:42:07 +0530 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.8 of 23 AR of the accused no.1 company deposed as DW-1. He placed on record the company master data of the accused no.1 company as well as of Majestic including details of the directors along with certificate u/s 65B Indian Evidence Act. The documents were taken on record as Ex.DW-1/1 (colly) and Ex.DW-1/2. The witness was cross examined on the method of obtaining those documents and on the certificate u/s 65B Indian Evidence Act. Thereafter, DE was closed.
ARGUMENTS
17. Ld. Counsel for the complainant began by emphasizing that accused no.1 is a company, while accused nos. 2 to 5 are its directors actively involved in the company's day-to-day operations. He referred to the buyback agreement on record, which remains undisputed by the accused. The agreement stipulated a total consideration of Rs. 3,78,76,866/-, out of which Rs. 18,76,866/- was paid as part payment at the time of signing the agreement. For the balance amount, the accused issued the cheques in question in accordance with the terms of the agreement. Counsel submitted that the accused failed to fulfill their contractual obligations as they neither made further part payments of Rs. 40 lakhs nor provided fresh cheques, as required by the agreement. Consequently, the complainant presented the cheques for the remaining liability. Upon presentation, the cheques were dishonored, and a legal demand notice was duly sent and delivered to the accused, to which they replied. Despite this, the accused failed to pay the due amount within the statutory Digitally signed by SIDDHANT SIDDHANT KUMAR Date: KUMAR 2024.12.16 16:42:12 +0530 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.9 of 23 period, leading to the filing of the present complaint.
18. The counsel argued that the accused breached the terms of the agreement by failing to pay the consideration amount. He highlighted the specific terms stipulating that the flats/apartments were to be transferred to the accused only after payments were made, and cheques were to be returned upon receipt of Rs. 40 lakhs as part payments. Since no payments were made, the complainant was entitled to present the cheques in accordance with the agreement.
19. The counsel further contended that the issuance of the cheques is admitted, invoking the statutory presumption under Section 139 of the NI Act. He argued that the presumption of a legally enforceable debt or liability lies upon the accused, which they failed to rebut. Reliance was placed on judgments regarding the presumption, including Ripudaman Singh v. Balakrishna (2019 2 SCC (Cri) 351), wherein the Hon'ble Supreme Court held that an agreement to sell constitutes a legally enforceable contract and payments made under such agreements are valid liabilities for the purpose of Section 138.
20. In conclusion, the learned counsel submitted that the accused failed to rebut the presumption under Section 139, and their defense that the flats were not transferred holds no ground since the agreement clearly stipulates that rights would only be transferred upon payment. He asserted that the liability arises from the buyback agreement and prayed for holding the accused Digitally signed SIDDHANT by SIDDHANT KUMAR KUMAR Date: 2024.12.16 16:42:16 +0530 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.10 of 23 company and its directors liable under Section 138 of the NI Act.
21. Ld. Counsels for the accused argued that the cheques in question were never intended for encashment and were issued solely as security, not for the discharge of any legally enforceable debt or liability. He relied on the terms of the buyback agreement, emphasizing that the cheques were to be returned upon part payments of Rs. 40 lakhs or replaced with fresh cheques if payments were not made by 31.01.2019. Counsel pointed out that the complainant failed to honor these terms and unjustifiably presented the cheques for encashment. He further submitted that the complainant's affidavit and complaint are silent on this critical aspect, and the omission weakens their case.
22. Counsel highlighted that CW-1 claimed during cross-
examination that an oral demand for fresh cheques was made; however, there is no corroborating evidence to substantiate this claim. He contended that the oral demand is an afterthought and lacks credibility, as no written communication or notice was placed on record to establish such a demand.
23. On a technical note, the counsel questioned the accountability of the accused directors. He argued that there is no evidence or documentation to prove that all the directors were involved in the day-to-day activities of the company. Moreover, not all directors were signatories to the buyback agreement or the cheques in question, and non-signatories should not have been summoned as accused. Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
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24. Counsel further argued that the complainant deliberately concealed material facts to misuse the process of law. He pointed out that the complainant failed to specify which cheque corresponded to which flat or apartment and could not establish the specific liability for each cheque. Additionally, no rights in the flats were ever transferred to the accused, which undermines the complainant's claim of liability.
25. To support his arguments, counsel relied on judgments, including M/s Indus Airways Pvt. Ltd. and Ors. v. M/s Magnum Aviation Pvt. Ltd., (2014) 12 SCC 539, where the Hon'ble Supreme Court held that post dated cheques issued as advance payments could not be treated as discharging a legally enforceable debt or liability. In conclusion, the counsel argued that no legally enforceable liability existed at the time of the cheques' presentation. He prayed for the acquittal of all the accused, asserting that the complainant failed to prove their case beyond a reasonable doubt.
LEGAL POSITION
26. The presumptions in favor of the complainant in cases u/s 138 NI Act were explained by the Hon'ble Supreme Court in Basalingappa v. Mudibasappa, 2019 SCC OnLine SC 491. The relevant portion is stated below -
"(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.Digitally signed by SIDDHANT
SIDDHANT KUMAR KUMAR Date:
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(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defense. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(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 defense. 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.
(iv) That it is not necessary for the accused to come in the witness box in support of his defense, Section 139 imposed an evidentiary burden and not a persuasive burden."
27. In order to rebut the presumptions, the burden of proof is upon the accused to prove on a preponderance of probabilities that there was no liability for the amount of impugned cheques.
28. Reliance is made upon the judgment of Hon'ble Supreme Court of India in Rajesh Jain v. Ajay Singh Special Leave Petition (Crl.) No.12802 of 2022. The relevant para reads -
"Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.12.16 16:42:29 +0530 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.13 of 23 Court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the Court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The Court would then take an overall view based on the evidence on record and decide accordingly".
APPRECIATION OF EVIDENCE and FINDINGS
29. The issuance of the cheques in question and the signatures thereon have been admitted by the directors of the accused company. By virtue of such admission, the statutory presumption under Section 139 of the Negotiable Instruments Act, 1881, is triggered in favor of the complainant. The burden of proof shifts to the accused to raise a probable defense and demonstrate, on a preponderance of probabilities, that the cheques were not issued for any legally enforceable liability. The accused may rely on material inconsistencies, terms of the agreement, or other evidence to rebut the presumption.
30. As the burden of proof lies upon the accused to rebut the presumption under Section 139 of the NI Act, the defenses raised by the accused shall be examined first. It is observed that accused no.1 company, along with the other accused persons, has taken a uniform stand and raised identical defenses. Therefore, their defenses shall be analyzed collectively.
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.14 of 23
31. The primary defense of the accused is that the cheques in question were not issued for any legally enforceable debt or liability but were intended as security, and thus were not meant to be encashed. The counsels for the accused further contended that not all directors were involved in the day-to-day activities of the company, and no evidence has been adduced by the complainant to establish their active participation. Another point of defense is that the complainant has deliberately omitted material facts from the complaint and supporting evidence, including details of the flats associated with each cheque and the reasons leading to the cheques' presentation. This alleged concealment of material facts, according to the accused, renders the complaint doubtful and raises questions about the complainant's bona fides.
32. These defenses raised by the accused will now be examined in light of the evidence on record and the terms of the buyback agreement to ascertain whether the statutory presumption under Section 139 has been successfully rebutted.
33. The defense raised by the accused that the cheques in question were issued as security does not by itself negate the liability under Section 138 of the NI Act. The law does not create an exception for cheques issued as security, and the mere labeling of a cheque as "security" does not absolve the drawer of liability if the cheque is issued in connection with a legally Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.12.16 16:42:37 +0530 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.15 of 23 enforceable debt or liability. The Hon'ble Supreme Court, in Sripati Singh vs. The State of Jharkhand & Anr., 2021 SCC Online SC 1002., clarified that a cheque issued as security, if dishonored, would attract the provisions of the NI Act, provided that the cheque is presented in consequence of a legally enforceable debt or liability that has become recoverable at the time of its presentation.
34. The accused, in their statement under Section 251 CrPC, admitted to the existence of the buyback agreement between the parties and acknowledged having made an upfront payment of Rs. 18.76 lakhs at the time of signing the agreement. However, they contended that the complainant failed to transfer the title documents of the flats as required and instead presented the cheques in question for encashment. This defense is examined in light of the evidence on record and the terms of the buyback agreement.
35. Clause 5 of the agreement explicitly provides that rights in two flats would be released or surrendered by the complainant upon receipt of a tranche payment of Rs. 40 lakhs. Clause 6 further stipulates that the title of the respective flats would be transferred to the accused only upon full receipt of the agreed consideration. These clauses make it clear that the complainant's obligation to transfer rights in the flats was conditional upon the accused fulfilling their payment obligations. In the absence of such payments, no obligation arose on the part of the complainant to transfer the title or related documents.
Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date: CT Cases 4642/2019 2024.12.16 16:42:41 +0530
Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.16 of 23
36. The defense that the complainant failed to transfer the title documents is contrary to the terms of the agreement. The complainant's obligation to release or transfer the rights was explicitly linked to the accused making the agreed payments. By failing to pay the consideration, the accused forfeited any entitlement to the title documents or rights in the flats. This defense, therefore, lacks merit and does not rebut the statutory presumption in favor of the complainant.
37. The accused relied upon the judgment in M/s Indus Airways (supra), arguing that post dated cheques issued as advance payments cannot be considered for the discharge of legally enforceable debt or liability. However, this reliance is misplaced and distinguishable in the context of the present case. The Hon'ble Supreme Court in Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd. (Criminal Appeal No. 867 of 2016), clarified that the question of whether a postdated cheque is issued for the discharge of liability depends on the nature of the transaction. The Court held that if a debt or liability exists or becomes legally recoverable on the date of presentation of the cheque, Section 138 of the NI Act is attracted, irrespective of whether the cheque is termed as "security.".
38. In the case at hand, the cheques in question were issued under the terms of the buyback agreement to secure the payment of the balance consideration of Rs. 3,60,00,000/-. As per Clause Digitally signed by SIDDHANT SIDDHANT KUMAR Date: KUMAR 2024.12.16 16:42:45 +0530 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.17 of 23 5 of the agreement, the accused were required to make tranche payments of Rs. 40 lakhs for the complainant to release rights in the flats. Clause 6 further provided that the title to the flats would only be transferred upon receipt of the full consideration. These terms unequivocally establish that the cheques were not issued as mere advance payments but were integral to ensuring payment obligations under the agreement.
39. The Hon'ble Supreme Court in Rangappa v. Sri Mohan (2010) 11 SCC 441 observed that once the issuance of a cheque and the signature thereon are admitted, there arises a presumption of a legally enforceable debt in favor of the holder. The presumption can be rebutted by the accused, but such rebuttal requires credible material or evidence. In the present case, the accused failed to lead any evidence to show that part payments of Rs. 40 lakhs were made, nor did they demonstrate compliance with the agreement's requirement to issue fresh PDCs if the cheques remain uncashed by 31.01.2019. Thus, the presumption under Section 139 remains unrebutted.
40. The distinction highlighted in Sampelly Satyanarayana Rao (supra) is particularly relevant. In Indus Airways (supra), the cheques were issued as advance payments for a cancelled purchase order, and no liability arose at the time of their presentation. In contrast, in Sampelly, the cheques were issued for repayment of loan installments that had fallen due, making the liability due at the time of presentation. Similarly, in the present case, the liability under the cheques had matured when Digitally signed by SIDDHANT SIDDHANT KUMAR Date: KUMAR 2024.12.16 CT Cases 4642/2019 16:42:49 +0530 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.18 of 23 the accused failed to make tranche payments or issue fresh cheques, as stipulated in the buyback agreement.
41. A postdated cheque is a recognized mode of payment under law, and its dishonor attracts Section 138 if the liability exists on the date of presentation. The accused's defense that the cheques were merely "security" is insufficient to rebut the presumption, particularly when the liability became legally enforceable on account of their non-compliance with the agreement. The evidence and the terms of the buyback agreement firmly establish that the liability existed at the time of presentation, and the accused failed to rebut the statutory presumption.
42. In view of the above, the accused's defense of non- existence of liability at the time of presentation is without merit. The cheques were issued in furtherance of an existing contractual obligation under the buyback agreement, and their dishonor clearly attracts the provisions of Section 138 of the NI Act.
43. The accused raised the defense that the complainant deliberately concealed material facts, particularly regarding which cheque corresponded to which flat or unit. However, this defense is unfounded in light of the terms of the buyback agreement and Schedule 1 annexed to it. Schedule 1 clearly specifies the tower and unit numbers of the 22 flats that were to be transferred under the agreement. However, the agreement does Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.12.16 16:42:53 +0530 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.19 of 23 not allocate specific cheques to specific unit numbers. Instead, Clause 5 of the agreement stipulates that rights in any two units were to be surrendered upon receipt of a tranche payment of Rs. 40 lakhs. Thus, the lack of specification of cheques to individual flats is consistent with the agreement and does not amount to concealment of facts by the complainant. This defense, therefore, lacks merit and does not rebut the presumption of liability under Section 139 of the NI Act.
44. The accused raised a technical defense asserting that not all directors of the accused company were involved in the day-to- day activities of the company, and hence, they could not be held liable under Section 138 of the NI Act. It was further argued that no evidence was led by the complainant to establish the active involvement of all directors in the affairs of the company or their connection with the buyback agreement. However, this defense is not supported by the evidence on record.
45. Section 141 of the NI Act provides that where an offense under Section 138 is committed by a company, every person who, at the time the offense was committed, was in charge of and responsible for the conduct of the company's business, is deemed to be guilty unless they can prove otherwise. In the present case, the buyback agreement was duly signed on behalf of the accused company by one of its directors, who was authorized by a board resolution dated 09.11.2018. This resolution, which could have been central to this defense, was never produced by the accused to substantiate their claim that other directors were not involved Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.12.16 CT Cases 4642/2019 16:42:57 +0530 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.20 of 23 in the day-to-day activities of the company.
46. In contrast, another board resolution is on record, which authorized the Authorized Representative (AR) in this case. This resolution is signed by all the accused persons, affirming their status as directors of the accused company. The fact that all directors signed this resolution demonstrates their active involvement in the company's business and day-to-day activities, including critical decisions like appointing an AR to represent the company in the present matter. This document directly contradicts the accused's defense that they were not involved in the company's management.
47. The burden to rebut the presumption under Section 141 lies squarely on the accused. Despite raising the defense, the accused failed to produce any evidence to demonstrate that certain directors were not involved in the company's management or its transactions with the complainant. The accused also did not lead any evidence to prove that their roles in the company were unrelated to the buyback agreement or the issuance of the cheques. The board resolution authorizing the AR and the absence of any evidence to the contrary establish that all accused persons were actively involved in the company's affairs during the relevant period. Consequently, the defense that some directors were not liable under Section 141 of the NI Act remains unsubstantiated and does not absolve them of liability.
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.21 of 23 CONCLUSION
48. In conclusion, all the ingredients of the offense under Section 138 of the NI Act are duly satisfied in this case. The issuance of the cheques and the signatures thereon are admitted by the accused, which triggers the statutory presumption under Section 139 that the cheques were issued for the discharge of a legally enforceable debt or liability. This presumption has not been rebutted by the accused, either through evidence or credible material on record.
49. The terms of the buyback agreement further establish the existence of liability. The agreement explicitly required the accused to make payments of Rs. 3,60,00,000/- through tranche payments of Rs. 40 lakhs each. The failure of the accused to make these payments or to issue fresh PDCs, as stipulated in the agreement, rendered the liability under the cheques enforceable at the time of their presentation.
50. Therefore, it is evident that the complainant has successfully proved the existence of a legally enforceable liability both through the statutory presumption and the terms of the agreement. The liability remains unrebutted, and the accused are found guilty of the offense under Section 138 of the NI Act.
51. Thus, on account of the appreciation of facts, evidence, materials on record and the settled legal positions as discussed Digitally signed by SIDDHANT SIDDHANT KUMAR Date: KUMAR 2024.12.16 16:43:05 +0530 CT Cases 4642/2019 Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.22 of 23 above this court is of the considered opinion that the complainant has successfully proven their case. Consequently, the court is presented with a compelling basis to proceed with conviction, holding the accused no.1 (company) and accused nos.2 to 5 (directors) guilty for the offense under Section 138 of the Negotiable Instruments Act.
This Judgment contains 23 pages and each page bears the signature of Ld. Presiding Officer.
Copy of this judgment be given free of cost to the convict. A copy of the order be uploaded on District Courts website.
Pronounced in the open court today i.e. on 16.12.2024 Digitally signed by SIDDHANT KUMAR SIDDHANT Date:
KUMAR 2024.12.16
16:43:15
+0530
(Siddhant Kumar)
JMFC (NI Act-06) South District,
Saket Courts, New Delhi
16.12.2024
CT Cases 4642/2019
Kiran Devi Bansal Vs. Ihome And Infrastructure Pvt Ltd And Ors Page No.23 of 23