Delhi District Court
"26. In Light Of These Extracts vs Ajay Singh Page No.1 Of 18 on 31 August, 2022
DLST020106802016
Registered on : 17.11.2016
Presented on : 19.11.2016
Decided on : 31.08.2022
Decision : Convicted
IN THE COURT OF METROPOLITAN MAGISTRATE (NI ACT)
AT SOUTH, SAKET DISTRICT COURT
PRESIDED OVER BY MS. NEHA BARUPAL
JUDGMENT
CT Cases/475240/2016 CNR NO.DLST020106802016 M/S AGROA INFRASTRUCTURE B136A, Lower Ground Floor, Malviya Nagar, New Delhi.
..............Complainant VERSUS AJAY SINGH C/o Vasudev Sharma, A1, WZ 494, Street No.16, Sadh Nagar, Palam Colony, New Delhi ............. Accused Offence punishable under section 138 of Negotiable Instruments Act, 1881 CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.1 of 18 BRIEF STATEMENT OF REASONS FOR THE DECISION FACTUAL MATRIX
1. The instant proceedings have originated out of a complaint preferred by Mr.Nikhil Agarwal, authorised representative (AR) of the complainant firm against Mr. Ajay Singh for the offence under section 138, Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act").
2. Briefly stated, the facts in the complaint are that in the month of July 2016, the accused approached Mr.Rahul Singh for a friendly loan of Rs.2,50,000/ but since he was not having arrangements of the said amount at that time, he arranged it from his relative, i.e., AR of the complainant firm and introduced the accused to the partners of the complainant firm. It is stated that the complainant firm disbursed the loan amount of Rs.2,50,000/ to the accused from its bank through RTGS. It is stated that the accused had promised to repay the said loan amount in the month of August 2016 and in view of the aforesaid liability, he had issued a cheque bearing number 128746 dated 04.07.2016 for the sum of Rs.2,50,000/ drawn on Union Bank of India, Kailash Colony, New Delhi in favour of the complainant (hereinafter referred to as the "cheque in question").
CT Cases 475240/2016M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.2 of 18
3. When the complainant presented the cheque in question for encashment, the same was returned unpaid upon presentation for the reason 'Funds Insufficient' vide return memo dated 16.09.2016. The complainant had presented the same cheque on two earlier occasions in August and on 13.09.2016 as per the complaint however the present complaint is based on the dishonour that occurred on 16.09.2016. It is stated that the dishonour of the cheque was brought to the notice of the accused through Mr. Rahul Singh but all in vain. A legal notice dated 15.10.2016 was duly sent by the complainant to the accused in this regard, but to no avail as the accused failed to pay the cheque amount within the prescribed period. Hence, the present complaint under Section 138 of NI Act was filed.
APPEARANCE OF ACCUSED AND TRIAL
4. The accused entered appearance after issuance of bailable warrants on 22.02.2019. Notice of accusation under Section 251, Code of Criminal Procedure, 1973 (hereinafter referred to as "Cr.P.C.") was served upon accused to which he pleaded not guilty and claimed trial thus, his plea of defence was recorded. The accused admitted only his signature on the cheque and stated that he was an employee of the complainant company. He further stated that at the time of starting his employment, the complainant company asked for a security cheque. He also stated that during his employment, he asked for the cheque in CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.3 of 18 question to be returned to him from Rahul but it was not returned to him on the pretext that the cheque had been misplaced.
5. The complainant was crossexamined after application under Section 145 (2) of NI Act on behalf of the accused was allowed. After closing of complainant evidence, statement of accused under Section 313 Cr.P.C. was recorded wherein the incriminating evidence were denied by him.
6. The matter was then fixed for defence evidence at which stage the accused examined himself as a defence witness. Final arguments were advanced on behalf of the both the parties.
EVIDENCE ON BEHALF OF THE COMPLAINANT
7. To support his case, the AR of the complainant examined himself as CW1 and tendered presummoning evidence by way of affidavit and adopted the same at the stage of complainant evidence. Mr. Rahul Singh was examined as CW2.
8. Documentary evidence led by the complainant:
Ex.CW1/A : Evidence by way of affidavit
Ex.CW1/1 (OSR) : Partnership Deed
Ex.CW1/2 (OSR) : Form 'A' and 'B'
CT Cases 475240/2016
M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.4 of 18
Ex.CW1/3 : Authorization Letter dated 15.11.2016
Ex.CW1/4 : Cheque in question dated 04.07.2016
Ex.CW1/5 : Return Memo dated 16.09.2016
Ex.CW1/6 : Legal Notice dated 15.10.2016
Ex.CW1/7 & Ex.CW1/8 : Postal Receipt & Courier Receipt
Mark 'X' : Complainant's account statement
Ex.CW1/9 : Tracking Report
EVIDENCE ON BEHALF OF THE ACCUSED
9. In support of his case, the accused examined himself as defence witness DW1 and filed Ex.DW1/A i.e., his resignation letter from Chintel Infracon dated 16.11.2015.
ARGUMENTS
10. Ld. Counsel for the complainant, Mr.Satender Choudhary, has submitted that the Rahul Singh and the accused herein were known to each other as they had worked together on a project when the accused was working at Chintel Infracon Pvt. Ltd. He has further submitted that the AR of the complainant firm is the brotherinlaw of Rahul Singh. He has contended that the complainant has transferred a sum of Rs. 2.5 lakh as friendly loan to the accused by RTGS which is evident from the account statement. It has been argued that the complainant has duly proved its case as all the ingredients of Section 138, NI Act have been CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.5 of 18 fulfilled in the present case. Ld. counsel for the complainant has also contended that the accused is an educated person who has prior work experience and yet did not adduce any documentary proof relating to his employment with the complainant firm nor has he filed a complaint regarding misuse of his cheque. In light of these submissions, he has prayed that the accused be convicted.
11. Per contra, ld. counsel for the accused, Mr.B K Pandey, has argued that the accused has no legal liability towards the complainant. Ld. counsel for the accused has relied upon M S Narayan Menon v. State of Kerala (2006) 6SCC 39 to contend that the standard of proof required from the accused to rebut the statutory presumptions is preponderance of probabilities and the accused is not required to prove his case beyond reasonable doubt. To buttress his argument, he has directed this court's attention to section 118 (b) of NI Act, which contains a rebuttable presumption that "every negotiable instrument bearing a date was made or drawn on such date". In light of this presumption, he has argued that the date on the cheque in question is 04.07.2016 whereas the complainant has transferred the amount on 08.07.2016, meaning thereby that the accused had no liability on 04.07.2016. Ld. counsel for the accused has also contended that the complainant has failed to prove the advancement of loan and that the statement of account does not show the purpose for which the amount CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.6 of 18 was transferred by the complainant. It has been argued on behalf of the accused that he had given a security cheque at the time of his employment in the complainant firm and that one of the questions put to the accused by the ld. counsel for the complainant shows admission that accused gave a signed security cheque. Next, it has been contended that the authority letter filed by the complainant is defective and the transcript of the audio recording filed by the complainant does not relate to the present transaction. It has also been argued on behalf of the accused that the complainant firm had no authority to advance loan as per the partnership deed. Several contradictions in the case of the complainant have been highlighted by the ld. counsel for the accused which are discussed in subsequent portion of this judgment. Thus, it has been prayed that the complainant has filed a false and fabricated case and the accused deserves to be acquitted.
POINTS OF DETERMINATION
12. The following points of determination arise in the present case:
1) Whether the complainant has been successful in raising the presumptions under Section 118 read with Section 139 of NI Act?
2) If yes, whether the accused has been successful in raising a probable defence?CT Cases 475240/2016
M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.7 of 18 THE LAW APPLICABLE
13. I have given my thoughtful consideration to the final submissions and have also perused the record. Before appreciation of evidence led on behalf of the parties, at the very outset, I would like to narrate the legal principles relevant for adjudication of complaint under Section 138 of NI Act.
14. The Hon'ble Supreme Court of India in Basalingappa v. Mudibasappa, 2019 SCC OnLine SC 491 at page 422 held as follows:
(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.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only from the materials brought on record by 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 defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
15. The threejudge bench of the Hon'ble Supreme Court in Rangappa v. S. Mohan, (2010) 11 SCC 441 has ruled that existence of liability itself is a presumption of law. It held as under:
CT Cases 475240/2016M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.8 of 18 "26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability."
16. The Hon'ble Supreme Court of India in C.C. Alavi Haji v. Palapetty Muhammed, (2007) 3 SCC (Cri) 236 at page 565 held as follows:
"A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the GC Act and Section 114 of the Evidence Act."
FINDINGS POINT OF DETERMINATION NO. 1:
17. It is not in dispute that the original cheque i.e., Ex. CW1/4 is drawn on an account maintained by the accused. The signature on the cheques in question is admitted. The dishonorment of the cheque in question for the reason "funds insufficient" can be seen from the return memo i.e., Ex. CW1/5 which has not been disputed. The return memo being signed and stamped by the concerned bank, the presumption of dishonour under section 146, NI Act arises. The receipt of legal demand notice i.e., Ex.CW1/6 has not been admitted by the accused however it is proved by way of the postal receipt and that is Ex.CW1/7 as well as by tracking report that is Ex.CW1/9. Perusal of the address mentioned in CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.9 of 18 the legal notice that it is same as the address mentioned in the bail bond furnished by the accused. The legal notice being properly addressed and sent, gives way to the presumption under section 114 of Indian Evidence Act and section 27 of the General Clauses Act that the legal notice has been received by the accused in light of the pronouncement in C. C. Alavi (supra). No evidence was led to rebut the aforesaid presumption on behalf of the accused save mere denial of the accused. Also, it is nobody's case that the accused tendered the amount entailed in the cheques in question upon entering appearance before this court in response to the summons issued in the instant case. The plea of the accused regarding the nonreceipt of the legal notice is accordingly rejected as being inconsequential.
18. The ingredients necessary for raising the statutory presumptions being fulfilled, the presumptions under sections 139 and 118, NI Act that the cheque in question was issued for a legally recoverable debt/liability stand activated.
19. Accordingly, the point of determination no.1 is decided in the affirmative.
POINT OF DETERMINATION NO. 2:
20. Now it is to be examined whether the accused has been able CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.10 of 18 to rebut the statutory presumptions. It is settled law that the burden to disprove the existence of legal liability is upon the accused and the presumption has to be rebutted by leading cogent evidence, on a preponderance of probabilities.
21. The accused has categorically denied availing a loan of Rs. 2.5 lakh from the complainant. The case of the accused is that he was an employee of the complainant and had secured this position with the help of Mr. Rahul Singh. He had given a blank signed cheque at the time of joining the complainant as an employee since he was informed by Mr. Rahul Singh that the complainant required such a cheque as per rule. The accused maintains that the transfer of Rs. 2.5 lakh from the complainant's account to his account is towards his salary for the period of three months when he worked for the complainant. In order to establish his defence, the accused crossexamined the complainant witnesses, i.e., CW1 (AR of the complainant, Mr. Nikhil Agarwal) and CW2 (Mr. Rahul Singh) and also entered the witness box and examined himself as DW1.
22. Both CW1 and CW2 were given suggestions that the accused was an employee of the complainant and had given the cheque in question as a security cheque and that the sum of Rs. 2.5 lakh transferred to the account of the accused was towards his salary for three CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.11 of 18 months. All the contrary suggestions on behalf of the accused to both the witnesses were denied by them.
23. The accused also examined himself and stated in his chief examination that he used to work in Chintel Infracon Pvt. Ltd. and knew Mr. Rahul Singh since 2013. He stated that he resigned from Chintel India Pvt. Ltd. In NovemberDecember 2015 and approached Mr. Rahul Singh for employment who arranged a job for him in complainant firm. The accused stated that he had given a copy of his experience certificate, Aadhaar Card etc, along with a blank signed cheque and worked at the complainant firm for three months. He further stated that the complainant did not pay him proper salary and did not give him the post as promised by them. Thereafter he left the complainant firm which gave him three months' salary together in around July 2016. Several times, he demanded that his cheque be returned to him however Mr. Rahul Singh told him that it has been misplaced but that he should have faith and the cheque will be returned.
24. The accused was crossexamined by ld. Counsel for the complainant on the aspects of his employment with the complainant however he failed to tell the name of the owner of the complainant firm, did not know the date and month of joining and leaving the complainant firm, failed to recall the name of the supervisor on the site of the CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.12 of 18 complainant where he worked. The accused could not produce any joining letter/appointment letter or resignation letter to show his employment in the complainant firm, though he brought the resignation letter from Chintel Infracon Pvt. Ltd. He stated that he had requested for issuance of joining letter orally but could not tell the name of the person he so requested. Bare perusal of the crossexamination of DW1 shows that he could not establish the factum of his employment at the complainant firm by way of oral testimony or documentary proof.
25. The accused testified that his salary at the complainant firm was about Rs. 86000/ per month and that he used to report to Mr. Rahul Singh regarding the finishing and tiles work at the site. Mr. Rahul Singh had testified as CW2 that he was drawing a salary of about Rs. 60,000/ per month. It is inconceivable that the accused, who reported to CW2, would be drawing a higher salary than CW2. The accused did not file any document in evidence to establish his salary either. Thus, this court finds that the accused has not been able to establish his main defence of receiving the alleged amount as salary for his employment in the complainant firm.
26. Ld. Counsel for the accused has argued that the complainant being a partnership firm could not have advanced a loan to the accused and thus there is absence of legally enforceable debt. He has CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.13 of 18 relied upon paragraph 2 of Ex. CW1/1(OSR) (partnership deed) which specifies the business of the firm, to contend that it does not include business to give loan. He has further contended that the complainant has not filed any document to show authority to grant loan without consent of the other partners of the firm and referred to paragraph 9 of Ex. CW1/1(OSR) which deals with operation of bank accounts. Ld. Counsel for the complainant has acceded that the business of the firm is not to give loan however he added that the firm does not carry out the business of giving loan, rather it has only given a friendly loan to the accused without interest which is not barred by any law including the Partnership Act. The complaint also states that the complainant has provided a friendly loan to the accused in lieu of which the cheque in question has been issued by the accused. No law has been highlighted by the ld. Counsel for the accused which bars a partnership firm from advancing friendly loan. Moreover, paragraph 9 of the deed merely grants authority to first and second partners to operate the account of the firm jointly or severally or as decided from time to time mutually. It is not incumbent upon the complainant to establish that the account was operated by the authorised person unless the point is raised by the accused during the course of trial. Moreover, the fact of the amount of Rs. 2.5 lakh being transferred by RTGS in itself is evidence of the fact that the account of the firm has been operated by an authorised person.
CT Cases 475240/2016M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.14 of 18
27. Another point of defence raised on behalf of the accused is that since the cheque in question is dated 04.07.2016 whereas the alleged amount was transferred on 08.07.2016, at the date on the cheque no legally enforceable liability existed against the accused. Perusal of the complaint and evidence by way of affidavit shows that the cheque was presented in August 2016 and thereafter on 13.09.2016 and 15.09.2016 which is after the alleged loan was agreed to be repaid by the accused. The basis for the present complaint is the dishonour shown by return memo dated 16.09.2016. Thus, it is apparent that the cheque in question was presented after it was ripe for payment. It has been held in paragraph 32 of Sunil Todi & Ors. v. State of Gujarat and Anr. 2021 SCC OnLine SC 1174 that "....Merely labelling the cheque as a security would not obviate its character as an instrument designed to meet a legally enforceable debt or liability, once the supply of power had been provided for which there were monies due and payable. There is no inflexible rule which precludes the drawee of a cheque issued as security from presenting it for payment in terms of the contract. It all depends on whether a legally enforceable debt or liability has arisen." In the case at hand also, the complainant has shown that liability had arisen at the time of presenting the cheque in question. As the ingredients of the offence under section 138, NI Act have been fulfilled, the cheque being antedated to the transfer of amount of the amount by the complainant to the accused does not defeat the case put forth by the CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.15 of 18 complainant especially when the accused has admitted his signature on the cheque in question.
28. Ld. counsel for the accused has highlighted certain contradictions in the case of the complainant. First, that it is mentioned in the complaint that CW2 is an old friend of the accused whereas CW 2 stated that he had a professional relation with the accused. Second, that the complaint states that CW2 introduced the accused to the partners of complainant firm in July 2016 whereas CW1 stated that the accused visited the office approximately in MayJune 2016. Third, that CW2 stated that CW1 knew about the accused being project manager whereas CW1 stated that he did not know the profession of the accused. This court finds that such aforementioned minor variations cannot be taken as rebuttal of presumption of law.
29. It has been also contended on behalf of the accused that the authorization letter filed on behalf of the complainant was not proper as it was not signed by CW1 in whose favour it was executed. However, CW1, who is one of the partners of the complainant firm has examined himself as a witness and was duly authorised by the remaining three partners of the firm to do so. Thus, this plea on behalf of the accused is rejected.
CT Cases 475240/2016M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.16 of 18
30. It has also been contended on behalf of the accused that the complainant has not established that the transcript relied upon to show admission of the accused pertains to the present transaction. The transcript is of the audio recording of the conversation between the accused and Mr. Rahul Singh which was filed along with a certificate mandated by section 65B of Indian Evidence Act. The accused when confronted with the same (Ex. DW1/X1) has admitted that such a conversation took place however he added that he is not aware as to which transaction the conversation relates nor which court case is being referred to therein. Ld. counsel for the complainant has submitted that only one case is pending between the parties. Though it is unclear from the contents of the transaction discussed in Ex. DW1/X1 as to which payment or court case is being discussed therein, even after keeping aside the said conversation from the purview of consideration, the complainant has proved its case beyond reasonable doubt from the other materials on record. The factum of transfer of the amount to the accused by RTGS is established. The accused has miserably failed to prove his defence that he was an employee in the complainant firm and received the alleged amount as salary. Admittedly there is no written communication by the accused demanding return of the cheque in question from the complainant or for issuing 'stop payment' instructions to his bank to stop the misuse of the cheque in question which was said to be lost by the complainant. There is no infirmity on part of the CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.17 of 18 complainant in compliance with the ingredients and time lines for establishing the offence under section 138 of NI Act.
31. Accordingly, in light of the aforesaid discussion, the point of determination no.2 is decided in the negative.
CONCLUSION
32. In view of the foregoing discussion, this court holds that complainant has established his case beyond reasonable doubt by proving all the ingredients under Section 138 NI Act by leading cogent evidence and the accused has failed to raise a probable defence.
33. Accordingly, accused Ajay Singh is hereby convicted for offence punishable under Section 138 NI Act qua the cheques in question in the present case.
33. Let the convict be heard separately on quantum of sentence. Copy of this judgment be given free of cost to the convict. Announced in the Open Court on this 31st August 2022. This Judgment consists of 18 signed pages.
Digitally signed NEHA by NEHA
BARUPAL
BARUPAL Date: 2022.09.01
16:20:08 +0530
(NEHA BARUPAL)
Metropolitan Magistrate (NI Act)03 (South), Saket/New Delhi/31.08.2022 CT Cases 475240/2016 M/S AGROA INFRASTRUCTURE V. AJAY SINGH Page No.18 of 18