Delhi District Court
Religare Finvest Limtied vs Kavita Mantosh Prasad on 7 May, 2024
IN THE COURT OF MS. AAKANKSHA, METROPOLITAN
MAGISTRATE, (NI ACT)-07
SOUTH-WEST DISTRICT, DWARKA COURTS, NEW
DELHI
Ct. Case No. 5006271/16
CNR No. DLSW02-015225-2016
Religare Finvest Limited
.........Complainant
Through: Mr. Surender Kumar, Advocate
Versus
Kavita Mantosh Prasad ..........Accused
Through: Mr. Vinod and Mr. Chetan, Advocate
(1) Name of the Religare Finvest Ltd..
complainant having office at B-2, Mansa
Ram Park, Near Metro Pillar
No.750, Uttam Nagar, New
Delhi-110059.
(2) Name of the accused Kavita Mantosh Prasad
Proprietor of Bali Clinic &
Diagnostic Centre having
office at 499/Sec.2C, Main
Link Road, Vasundhra,
Sahibabad, Distt.
Ghaziabad, Uttar Pradesh-
201002.
(3) Offence complained of Section 138 Negotiable
Ct. Case No.5006271/16
Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 1 of 29
Digitally
signed by
AAKANKSHA
AAKANKSHA Date:
2024.05.07
16:46:05
+0530
or proved Instruments Act, 1881
(4) Plea of accused Pleaded not guilty
(5) Date of institution of 23.11.2016
case
(6) Date of conclusion of 01.05.2024
arguments
(7) Date of Final Order 07.05.2024
(8) Final Order ACQUITTAL
JUDGMENT
1. The complainant Religare Finvest Ltd. through its AR Sh. Kisalay Kartikey has instituted this complaint u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') against accused Kavita Mantosh Prasad, on 22.11.2016.
2. The factual matrix as can be culled out from the complaint is that upon request of Himi Cargo Services India Pvt. Ltd., complainant provided loan facility of Rs.15,00,000/- to Himi Cargo Services India Pvt. Ltd. vide Loan Agreement No. XSMENAS00060103, accused being director of said company and a co-borrower of the said loan agreed to repay the loan amount in equal monthly instalments as per agreed scheduled but failed to comply with the terms and conditions of loan agreement and thus the loan facility was recalled by complainant company. Thus, in discharge of his liability, accused issued cheque in question bearing no.400769 dated 03.10.2016 for a sum of Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 2 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:46:15 +0530 Rs.13,95,700/- drawn on ICICI Bank to complainant with assurance of its encashment upon presentation. However, to the complainant's dismay the said cheque was returned unpaid with remarks "Insufficient Funds" vide return memo dated 05.10.2016. The complainant then issued a legal notice dated 24.10.2016 calling upon the accused to pay the cheque amount within 30 days from the receipt thereof but the accused failed to make the payment despite notice being duly served upon him, thus constraining the complainant to file this complaint u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') seeking redress against the dishonor of the cheque in question.
3. With a view to establish a prima facie case in order to enable the court to summon the accused, complainant led pre- summoning evidence by way of affidavit Ex. CW-1/1. The complainant relied upon following documentary evidence:
(a) The Power of Attorney, which is Ex. CW1/A (OSR).
(b) Original cheque bearing no. 400769 dated 03.10.2016 for a sum of Rs.13,95,700/- drawn on ICICI Bank, which is Ex.CW1/B.
(c) Return memo dated 05.10.2016, which is Ex.CW1/C.
(d) Office copy of legal notice dated 20.10.2016, which is Ex.CW1/D.
(e) Receipt of postal department, which is Ex.CW1/E.
(f) Returned Envelope, which is Ex.CW1/F. Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 3 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:46:24 +0530
(g) Present complaint, which is Ex.CW1/G. Complainant closed his pre-summoning evidence on 11.01.2017.
4. On the basis of above material and finding a prima facie case made out against the accused, the accused was summoned vide order dated 11.01.2017. Accused entered his first appearance, through his counsel, on date fixed i.e. 29.03.2017.
5. Notice u/s 251 Cr.P.C. was framed against accused on 04.07.2017 stating out to him the substance of accusation, to which he pleaded not guilty and claimed trial. His defence was recorded at the stage of framing of notice in compliance of directions passed by Hon'ble High Court of Delhi in Rajesh Aggarwal v. State 171 (2010) DLT 51. The accused took defence that the cheque in question bears his signature but it was not given by him to any one, he did not receive legal notice, he does not owe complete amount as mentioned in the cheque, he admits his liability towards complainant for Rs.10,00,000/-, he had taken loan of Rs.15,00,000/- for his company Himi Cargo Services India Pvt. Ltd., he had given certain number of cheques in the name of Himi Cargo Services India Pvt. Ltd. to the complainant company.
6. Accused was granted right to cross-examine the complainant on oral prayer u/s 145(2) NI Act made on behalf of accused vide order dated 04.07.2017. Mr. Arun Mohan Sharma was substituted as AR for the complainant vide order dated Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 4 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:46:33 +0530 18.02.2020 and filed fresh evidence by way of affidavit. The substituted AR was examined as CW-1 relying upon all the documents filed in pre-summoning evidence and also relying upon Power of Attorney and Board Resolution Ex. CW-1/A1 in post-summoning evidence. CW1 was duly cross-examined and discharged. Complainant's evidence was closed on 16.05.2023.
7. Statement of accused was recorded u/s 313 Cr.P.C. r/w section 281 Cr.P.C. on 19.12.2023 wherein all the incriminating evidence was put to the accused and he was granted an opportunity to explain the circumstances appearing against him at trial. While explaining the circumstances appearing in evidence against him, accused stated without oath that the cheque in issue bears his signatures but the other details were not filled by him, it is correct that he availed loan facility of Rs.15,00,000/- from complainant being director of Himi Cargo Services India Pvt. Ltd., he did not receive legal notice but the same bears correct address of his office, he is a sleeping partner, he did not give the cheque in issue to complainant and he does not know how the cheque came in possession of complainant. Accused preferred not to lead evidence in his defence.
8. At the stage of final arguments, Ld. counsel for complainant filed written arguments and submitted that accused has not disputed the validity of loan facility of Rs. 15 lacs and has admitted liability towards her company Himi Cargo Services in notice framed u/s 251 Cr.P.C. and also admitted giving certain number of cheques to complainant but also stated that she did not Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 5 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:46:41 +0530 give cheque in issue to complainant, however no complaint has been filed by accused regarding loss of cheque in question and stop payment instructions were issued by accused to her banker, since accused has admitted her signature on cheque presumption u/s 139 NI Act is raised against the accused, execution of loan agreement has not been disputed during cross-examination of AR for complainant, legal notice was sent at correct address of accused and thus presumption u/s 27 General Clauses Act applies, even otherwise accused failed to pay the cheque amount within 15 days after being served with summons in the present case,, accused has admitted the loan of Rs. 15 lacs but has denied liability of cheque amount, however cheque amount is less than the loan amount, accused claimed to have paid 9 instalments which was admitted by AR, after adjustment of 9 EMIs also the liability of accused is still made out to the tune of the cheque amount, accused has not brought on record his defence that even after adjustment of 9 EMIs she was not liable to pay the cheque amount, accused never entered the witness box, present AR was duly authorized by power of attorney and the document was duly executed under the seal of the complainant company and leaves no doubt in authority of AR to pursue the matter and prayed to convict the accused. He further submitted that accused failed to explain what happened to his cheque, to whom he gave the cheque, whether cheque was lost or misplaced, only to confuse the witness accused put questions about another company Himi International whereas the applicants of loan in question are Himi Cargo and accused, cheque was issued by accused and thus company was not made a party, that the complaint is not pre mature as the returned envelope shows that first intimation was Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 6 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:46:50 +0530 served on 29.10.2016, till 08.11.2016 the letter was kept at the post office and when none came to claim it the envelope was returned, thus the date of intimation served shall be the date from which the period of limitation has to be construed and thus the case is filed within the period of limitation, the next defence taken by accused in his written arguments are about the capacity of AR for complainant but since accused never challenged the capacity of AR during the trial and in his cross-examination, accused now cannot at the stage of final arguments raise such dispute.
9. Per contra, Ld. counsel for accused also filed written arguments and submitted that the complainant has not proved the offence beyond reasonable doubt, four defences are raised by accused, the present complaint is filed earlier to accrual of cause of action and is therefore not maintainable, the complaint and affidavit is silent on the date of receipt of packet from post office, the envelope was received back with endorsement 'not claimed' which is dated 08.11.2016 and therefore limitation to file the case starts from 24.11.2016 but this case has been filed on 22.11.2016 and is premature. He further submitted that the complaint is not maintainable as Arun Mohan Sharma has no locus standi to file affidavit of evidence and depose on oath, concerned board resolution has not been proved in accordance with law, complainant company is a juristic person, as per mandate of Companies Act, resolutions conferring authority are required to be passed before initiating any legal proceeding, Section 193 Companies Act guides how minutes of Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 7 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:46:57 +0530 all proceedings of every general meeting is maintained and it provides that the minutes should be entered in books kept for that purpose with their pages consecutively numbered, Arun Mohan Sharma has produced a power of attorney which is not admissible in evidence as it is neither executed not authenticated before any public notary, it is not notarized as per Notaries Act, it is just attested by notary, attestation, execution and authentication are different things, mere attested copy cannot carry presumption u/s 85 Evidence Act, the power of attorney is required to be executed before any authenticated person by one of the person mentioned in Section 85 and the person authenticating must show that such person has not only certified it but also executed before himself, in present case power of attorney is not executed before a notary, it is just attested and does not carry presumption u/s 85 Evidence Act, thus testimony on behalf of complainant is without any authority, mere exhibiting board resolution is also not enough unless original minutes of meeting are produced before the court, thus certified copy of board resolution cannot be read in evidence. He further challenged this case on the basis that notice itself is not proved and thus no offence is made out in absence of service of notice, date of receipt of notice by accused is not mentioned in the pleadings, no statement of account or books of account have been produced by complainant to establish the due amount, no date of loan has been mentioned, no period of loan as to when the loan was to be returned has been stated, no document regarding loan has been filed, nothing has been placed on record to show that there was an agreement between complainant and accused wherein accused was co-applicant of Himi Cargo Services India Pvt. Ltd., accused is not legally liable for the Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 8 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:47:05 +0530 cheque in issue, disputed cheque was not in discharge of liability rather was handed over as a security at time of initiation of loan proceeding, complaint is silent on the date when the cheque was tendered, there is difference in the handwriting and ink of particulars of the cheque which proves that undated cheque was handed over, complainant has given evasive answers during his cross-examination about how the complainant is in possession of cheque, there is no tri-partite agreement between complainant, accused and Himi Cargo Services India Pvt. Ltd. thus there is no material on record to prove that accused has taken over the liability of Himi Cargo Services India Pvt. Ltd., no document has been filed to show that loan amount was disbursed to Himi Cargo Services India Pvt. Ltd., existence of legally recoverable debt is not a matter of presumption u/s 139 NI Act and complainant has failed to prove its case beyond doubt and thus prayed to acquit the accused. To support his contention, Ld. counsel for accused relied upon the cases of A.S. Rathore v. Vimal Jain, Afrojkhan v. Mandodara, Candy Spirit Pvt. Ltd. v. Reeves Mia & ors. (2012) ALL MR (Cri) 403, Vikky v. M/s Navbharat Press, Ashish C. Shah v. M/s Seth Developers (2011) ALL MR(Cri)1528, Surendra Sanganeria v. Ramesh Rijumal & anr., Mahesh Chand Sharma v. Hari Chander @ Hariya, Devarsha Dnyaneshwar Parob v. Mulgao Sirigao Advalpal, S.E. Investments Ltd. v. Prem Singh, Floyd Coutinho v. Beatrica Dias & State, Rajendra Baburao Mahale v. Varsha Mahesh Dangarekar & anr. and Rambhau Tulsiram Bhusari v.
Assanand Dhanumal Vensiani & ors.
Digitally signed by AAKANKSHA AAKANKSHA Date:
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10. After hearing the arguments advanced on behalf of both the parties and perusing the record carefully, the appreciation of evidence and findings of the court are as below.
11. It would be apposite to first consider the legal position serving as base to the offence underlying Section 138 NI Act. The following legal requirements need to be satisfied in order to constitute an offence u/s 138 NI Act, as held by Hon'ble Supreme Court in the case titled as Kusum Ingots & Alloys Ltd. v. M/s Pennar Peterson Securities Ltd.: (2000) 2 SCC 745:
(i) that a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
(ii) that the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iii) that the cheque is returned by the bank unpaid either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) that the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 10 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:2024.05.07 16:47:22 +0530
information by him from the bank regarding the return of the cheque as unpaid;
(v) that the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;
The above legal requirements are cumulative, mean- ing thereby that only if all the aforementioned ingredients are sat- isfied can the person who had drawn the cheque be held liable for offence u/s 138 NI Act.
12. Burden of proof: The claim based under the provisions of Negotiable Instruments Act is an exception to the general rule of law that burden of proof lies on the prosecution. The two specific provisions viz. Section 118 (a) and 139 of NI Act contemplates that a presumption is attached in regard to each and every negotiable instrument that the same was drawn and issued against due discharge of the liability and thus, whenever any claim is made on the basis of a negotiable instrument, the presumption has to be drawn in favour of the holder of the cheque (drawee) and the law has put the burden to rebut the presumption on the accused that the cheque was not issued by him against discharge of a debt or a liability. In case, the accused is not able to rebut the presumption and fails to prove his defence, the presumption becomes absolute and it has to be assumed that the cheque was issued by the accused in discharge of debt or liability and consequently, accused is assumed guilty Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 11 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:47:32 +0530 of the offence. It was held by Hon'ble Supreme Court in the case of Rangappa v. Mohan: 2010 (11) SCC 441 that presumption of Section 139 of N.I. Act also includes the existence of legally enforceable debt:
14. 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.
Hon'ble Supreme Court, in the case of Hiten P. Dalal v. Bratindranath Banerjee: 2001 (6) SCC 16 held that the presumption mentioned in the section 139 NI Act is a presumption of law and not a presumption of fact and thus, this presumption has to be drawn in favour of the drawee and the burden to rebut the presumption with the probable defence is on the accused.
This is indeed an instance of the rule of 'reverse onus', where it is incumbent on the accused to lead what can be called 'negative evidence' i.e. to lead evidence to show non- existence of liability. Keeping in view that this is a departure from the cardinal rule of 'presumption of innocence' in favour of the accused and that negative evidence is not easy to be led by its very nature, it is now settled that the accused can displace this presumption on a scale of preponderance of probabilities and the lack of consideration or a legally enforceable debt need not be proved to the hilt or beyond all reasonable doubts. The accused can either prove that the liability did not exist or make the non- existence of liability so probable that a reasonable person, ought under the circumstances of the case, act on the supposition that it Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 12 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:47:40 +0530 does not exist. He can do so either by leading own evidence in his defence or even by punching holes in the case of the complainant in the testing ordeal of cross-examination. This can be deciphered from relevant para no.21 of Hiten P. Dalal (supra):
21. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists". Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'.
Further, in Bharat Barrel v. Drum Manufacturing:
AIR 1999 SC 1008 Hon'ble Supreme Court held that the accused has to rebut the presumption and mere denial of passing of consideration is no defence. It is, thus, clear that in cases of Section 138 NI Act, upon proof of foundational facts, law presumes in favour of drawee that the cheque was issued by the accused in discharge, wholly or in part, of legally enforceable debt or liability and the burden to rebut the same is upon the accused. The burden does not have to be conclusively established but the accused has to prove his defence on preponderance of probability.
13. Now applying the above law to the facts of the present case, it has to be adjudged whether the legal requirements Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 13 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:47:47 +0530 laid down hereinabove have been fulfilled in the instant case.
13.1. The first legal requirement is:
"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 of any debt or other liability."
At the outset, it has to be proved that the accused had issued the cheque in question on his account maintained with a bank for discharge of any debt or other liability. In the instant case, accused has admitted her signatures on the cheque in question in her statement recorded u/s 313 Cr.P.C. and in notice framed u/s 251 Cr.P.C. The cheque in question has also been drawn on the account maintained by her with ICICI Bank. The said fact has not been denied by accused at any stage of proceeding.
It was held in the case of Kalamani Tex & anr. v. P. Balasubramanian: 2021 SCC Online SC 75 Hon'ble Supreme Court held that:
"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NI Act. The statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him."
The above said principle has also been crystallized by Hon'ble Supreme Court in the case of Basalingappa v. Mudibasappa:
(2019) 5 SCC 418, by observing that:Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 14 of 29
Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:47:55 +0530 "25. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarize the principles enumerated by this Court in following manner:
(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.
(v) It is not necessary for the accused to come in the witness box to support his defence."
13.2. In the instant case, the accused having admitted her signature on the cheque in question and the said cheque being drawn on her bank account, a mandatory presumption automatically arises in favour of complainant by virtue of Section 118(a) r/w 139 NI Act that the cheque in question was issued by her in discharge of, whole or part of, legally enforceable debt or liability.
13.3. Now the burden shifts upon accused to rebut the above presumption by raising a probable defence, by leading evidence or bringing such facts on record in the cross- examination of the complainant that could make the latter's case Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 15 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:48:03 +0530 improbable. If, in such a case, the accused is proved to have discharged the initial onus of proof placed on him by showing that the existence of consideration was improbable or doubtful or illegal, then the onus will again shift back to the complainant who will then be under an obligation to prove it as a matter of fact and failure to do so will disentitle him to any relief on the basis of the negotiable instrument (as held in Satish Sharma v. State NCT of Delhi & anr.: (2013) 204 DLT 289).
13.4. The accused has chosen to do so by cross-examining the complainant. During cross-examination CW-1/complainant deposed, in brief, that he is working with complainant company since 06.02.2020, he did not see previous AR signing any document, he cannot identify signature of previous AR, it is correct that loan was advanced to Himi International and accused is director as well as co-applicant in present loan in question, loan agreement has not been placed on record, it is correct that loan amount was not credited in the account of accused but in the account of Himi International, he cannot say if any security cheque was taken at the time of loan transaction, approximately 9 EMIs were paid, the company to whom loan was given has not been made a party to the present case, accused has given cheque in her personal capacity and thus she has been made a party, he cannot tell if loan account of Himi International was settled by complainant on 21.08.2020.
13.5. The accused admitted her liability to the extent of Rs. 10 lacs in her defence recorded under section 251 Cr.P.C.Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 16 of 29
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2024.05.07 16:48:10 +0530 stating that she availed loan of Rs. 15 lacs for her company Himi Cargo Services India Pvt. Ltd. and gave certain number of blank signed cheques to complainant. Further, in her statement u/s 313 Cr.P.C. accused again admitted borrowing loan of Rs. 15 lacs from complainant vide loan agreement. Thus, borrowing of loan amounting to Rs. 15,00,000/- by accused for his company from complainant is an admitted fact. However, during cross- examination of CW-1, the only defence raised by accused was that the cheque in question was issued to complainant only for payment of one EMI, and that the cheque has been misused. The further cross-examination regarding loan taken by one Himi International does not assume much significance as it has not been pressed by Ld. counsel for accused during oral arguments when Ld. counsel for complainant argued that only to confuse the witness accused asked questions of another company namely Himi International. It also does not assume much significance in view of admission of accused u/s 251 Cr.P.C. taking loan for his company Himi Cargo Services India Pvt. Ltd.
13.6. The defence taken by accused during cross-
examination of CW-1 that she only gave the cheque in issue to complainant for payment of one EMI, was contradicted by accused herself when she denied giving cheque to complainant in her statement u/s 313 Cr.P.C. However, again accused failed to lead any evidence to the said effect or explain any circumstances under which she parted with the possession of the cheque in issue. Accused neither disputed possession of cheque with complainant in her notice u/s 251 Cr.P.C. not during cross-
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2024.05.07 16:48:17 +0530 examination of CW-1, nor did she step into the witness box or examine any witness. Even her defence is not coherent. Although she admits borrowing loan, at one point of time she also admits issuing cheque to complainant for payment of one EMI but at another point of time, she disputes possession of cheque with complainant.
13.7. Ld. counsel for accused raised objection that accused is not legally liable for the cheque in issue as no document has been filed to show that loan amount was disbursed to Himi Cargo Services India Pvt. Ltd., complainant has given evasive answers during his cross-examination about how the complainant is in possession of cheque, there is no tri-partite agreement between complainant, accused and Himi Cargo Services India Pvt. Ltd. thus there is no material on record to prove that accused has taken over the liability of Himi Cargo Services India Pvt. Ltd. However, the said objection gets dismissed in view of admission of accused herself in her plea of defence u/s 251 Cr.P.C. and in her statement u/s 313 Cr.P.C. that she borrowed loan from complainant for her company Himi Cargo Services India Pvt. Ltd. and when she herself admitted her liability though to the extent of Rs. 10 lacs only. It is also settled law that in cases involving offences u/s 138 NI Act the courts ought not to proceed as if the complainant is required to prove the debt owed to him and statutory presumption has to be raised in his favour which can only be rebutted by either showing that consideration and debt did not exist or that under the particular circumstances of the case non-existence of consideration and Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 18 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:48:25 +0530 debt is so probable that a prudent man ought to suppose that no consideration or debt existed [as held in the case of Uttam Rai v. Devinder Singh Hudan (2019)10 SCC 287]. The complainant is not required to prove his case beyond all reasonable doubts as opposed to contention of Ld. counsel for accused and once presumption u/s 139 NI Act is raised, the burden is on accused to rebut such presumption by bringing on record any material in proof of his defence that cheque was not issued in discharge of his liability. It is only when the accused is able to successfully raise such defence on the touchstone of preponderance of probability, that the complainant is burdened to prove his case beyond reasonable doubt. However, in the present case despite admitting her liability to the extent of Rs. 10 lacs out of total loan of Rs. 15 lacs, accused failed to lead any evidence even through cross-examination of CW-1 that she paid the remaining sum to the complainant and was not liable to the extent of the cheque amount. In absence of any evidence on behalf of accused and in view of her contrary defences as stated hereinabove, it can be safely held that accused has been unable to raise any probable defence in her favour, 13.8. The objection raised by Ld. counsel for accused regarding improper appointment of AR for complainant is dismissed in view of the fact that no such objection to the power of attorney as well as board of resolution was raised by accused during the examination of AR for the complainant. No question disputing the authority of AR for the complainant was raised whilst during his cross-examination. Even otherwise, in the event Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 19 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:48:32 +0530 of substitution of AR for complainant, there is no legal requirement for amending a criminal complaint, as opposed by Ld. counsel for accused. The case of Candy Spirit Pvt. Ltd. v. Reeves Mia & ors. (2012) ALL MR (Cri) 403 relied upon by Ld. counsel for accused does not favour the defence. Even in that case it is clearly observed that it was clearly suggested to complainant that he had no authority to file the case and thus complainant was under obligation to bring on record board resolution. However, in the present case no such challenge to authority of AR for the complainant was laid out during his cross-examination or at the time of his substitution. Further, in the case of Vikky v. M/s Navbharat Press heavily relied upon by Ld. counsel for accused it has been clearly held that mere attestation of affidavit by notary public is not sufficient to raise a presumption u/s 85 Evidence Act. Section 85 of Indian Evidence Act presumes execution and authentication of a document purporting to be a power of attorney. It was further observed that authentication of a document is something more than attestation. If a power of attorney is to be registered then the same would require attesting witnesses at the time of registration. Authentication involves that executant is the person before him and is identified to the satisfaction of Notary Public; the record being in due form of law; the executant confirming his knowledge regarding the contents of the documents to be true and genuine; the actual execution of document before him and the executant having admitted voluntarily to have executed the POA coupled with the appropriate register maintained by the Notary Public in this regard, with according entries, therein. In that case, neither the power of attorney carried any signature of Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 20 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:48:38 +0530 any witness nor was signed by the donee and only the word 'attested' was mentioned by Notary Public. However, in the present case, the power of attorney bears the signature and stamp on behalf of the complainant company and also bears signatures of two witnesses. It has also been registered. Thus, the observation made in above case cannot be read in a dismantled way to say that in any document where only the word "Attested" is mentioned is not attested and executed as per law. It was further held in the case of Vikky v. M/s Navbharat Press (supra) that even if presumption u/s 85 Indian Evidence Act was not raised in absence of authentication, still a power of attorney can be proved by establishing due execution by producing the necessary witnesses/executant or any other mode as is permissible under Evidence Act. However, in the present case no defence has been raised by accused regarding authenticity of power of attorney. The same can be said even for board of resolution. The original minutes of meeting were never challenged or called for by accused during cross-examination of CW-1. Thus, in absence of accused disputing the genuineness and execution of board of resolution and in absence of accused ever disputing the authority of AR for the complainant in deposing on behalf of complainant, such defence cannot be said to be proved upon only oral objection raised at the time of final arguments.
13.9. Thus, accused has been unable to rebut the presumption of law and discharge the burden of proof by raising Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 21 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:48:45 +0530 a probable defence that the cheque in question was not issued to complainant in discharge of her liability.
The first legal requirement is, thus, proved in favour of complainant.
14. The second legal requirement is:
"That cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier."
The cheque in question Ex. CW-1/B is dated 03.10.2016. The cheque returning memo Ex. CW-1/C is dated 05.10.2016, which proves that the cheque in question was presented within the period of its validity. Further, defence has failed to controvert the said fact.
Thus, the second legal requirement is adjudicated in favour of complainant.
15. The third legal requirement is:
"That cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank."
Section 146 NI Act presumes the fact of dishonour of cheque upon production of bank's slip or memo having the official mark denoting that the cheque in question has been dishonoured. This is also a rebuttable presumption and the upon production of such bank memo, the burden shifts upon accused to disprove the same. In the instant case, a presumption has been Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 22 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:48:52 +0530 raised in favour of complainant by virtue of Section 146 NI Act that the cheque in question was dishonored for the reason stated therein viz. funds insufficient which falls within the offence u/s 138 NI Act and therefore, the burden now shifts upon the accused to rebut this presumption by establishing some reasonable justification for the same. But the accused has admitted her signature on the cheque in question.
Thus, the third legal requirement is adjudicated in favour of complainant.
16. The fourth legal requirement is:
"The payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid."
In the instant case, the cheque in issue was returned dishonoured on 05.10.2016. The complainant sent a legal notice dated 20.10.2016 (Ex. CW-1/D) addressed to the accused. Speed post receipt dated 24.10.2016 (Ex. CW-1/E) is also on record, which proves that the legal notice was sent within the prescribed period. Accused has although denied receiving of legal notice but she has not disputed her address to which the legal notice was addressed. Thus, it can be said that the legal notice was properly addressed to the correct address of accused and by virtue of presumption u/s 27 General Clauses Act accused is deemed to have received the legal notice, if the notice has been sent to correct address by post.
Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 23 of 29Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:49:00 +0530 16.1. Even otherwise, law expects a person pleading non-
receipt of any demand notice to prove his bona fide by making the payment of the cheque amount within 15 days of receiving court summons. This is crystallized by the verdict of Hon'ble Supreme Court in the case titled as C.C. Alavi Haji v. Palapetty Muhammed & anr.: (2007) 6 SCC 555:
"17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. 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 G.C. Act and section 114 of the Evidence Act."
16.2. In the case at hand, despite issuance of summons and appearance of accused before the court, accused has failed to pay the cheque amount to the complainant and thus is precluded from raising the plea of non-service of demand notice. It is also an undisputed fact and a matter of record that the accused has failed to make the payment till date let alone making payment within 15 days of receipt of notice.
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2024.05.07 16:49:08 +0530 The fourth legal requirement is, thus, adjudicated in favour of complainant.
17. The fifth legal requirement is:
"The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice."
It is an undisputed fact and also a matter of record that the accused has failed to make the payment. However, this legal requirement also requires giving accused at least a period of 15 days to make the payment demanded under the legal notice, before a complaint u/s 138 NI Act could be presented before a court of law. The legal notice was posted to be delivered upon ac- cused on 24.10.2016 (according to postal receipt Ex. CW-1/E). The present complaint has been filed on 22.11.2016. There is no tracking report on record to conclude the date of delivery of legal notice upon accused. However, the complainant has relied upon the returned envelope Ex. CW-1/F. The returned envelope re- flects the date of first intimation as that of 29.10.2016 and second intimation as that of 31.10.2016. It further reflects the date of 08.11.2016 as 'not claimed return to sender'. The point for con- sideration now is which date amongst the above mentioned dates on returned envelope shall be construed to compute the period of limitation for filing the present complaint u/s 142 NI Act. Section 142 NI Act enables a court to take cognizance on a complaint only if it is made within one month of the date on which the cause of action arises under clause (c) of the proviso to Section 138 NI Act.
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2024.05.07 16:49:16 +0530 17.1. Ld. counsel for complainant contended that the com-
plaint has been filed within the period of limitation and is not pre-mature as the date of 08.11.2016 is the date till when the en- velope was kept at the post office but was returned unclaimed and thus the date of last intimation i.e. 31.10.2016 shall be con- strued as the date for reckoning the period of limitation of one month to file the complaint. Whereas Ld. counsel for accused ve- hemently argued that the present complaint is filed earlier to ac- crual of cause of action and is therefore not maintainable, the complaint and affidavit is silent on the date of receipt of packet from post office, the envelope was received back with endorse- ment 'not claimed' which is dated 08.11.2016 and therefore limi- tation to file the case starts from 08.11.2016 but this case has been filed on 22.11.2016 and is premature. He relied upon the case of Surendra Sanganeria v. Ramesh Rijumal & anr. and Rambhau Tulsiram Bhusari v. Assanand Dhanumal Vensiani & ors. in support of his contentions.
17.2. In Surendra Sanganeria (supra), Hon'ble Apex Court observed that except for mentioning that the notice had been sent on 01.03.2005 and that the same had been received by the appellant, no date has been mentioned as to when the same was received by the appellant. The said fact becomes relevant on account of the fact that period of computing the cause of action and the limitation prescribed under section 142 cannot be deter- mined until and unless the date of receipt of notice is indicated.
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2024.05.07 16:49:24 +0530 In the present case as well, the complaint is silent on the date of receipt of notice.
17.3. Ld. counsel for accused admitted that the case of Rambhau Tulsiram Bhusari (supra) resulted against the accused but still relied upon the law laid down therein. Hon'ble High Court of Bombay in the above case although directed the com-
plainant to file a fresh case on the mere ground that the trial court acquitted the accused solely for the reason that the complaint was pre-mature without recording its findings on other issues, the ra- tio decedendi laid down was as under:
"15. It is true that the remark "intimation' and the remark "not claimed/unclaimed" has got different meaning. If the addressee is not found on the address, there is a practice to leave intimation on that address. Normally, the remark "not claimed" follows the acts of intimation. It may happen that the addressee may come to post and collect the article. If he does not come, postal authorities used to return to the sender the undelivered article with remark "not claimed".
16. So, it will be pre-mature, to consider the date of remark "intimation" as the date of which notice is served. So the date on which remark "not claimed" is put has to be pre- sumed as the date of service of notice. I came across a judg- ment in case of A. Chinnaswami v. M/s. Bilakchand Gyanc- hand Company, reported in 1998(3) Bom CR 120, wherein process issued for section 138 of NI Act offence was quashed on different grounds but, complaint was held within limita- tion. 20.12.2014, was the date of intimation and on 27.12.2014 was the date on which envelope was returned as "not claimed". The period of limitation starts from 27.12.1994 and not from 20.12.1994. No doubt these are the factual observations and before drawing the inference, there was no discussion of any rules, still it guides me in this case. No other ruling in which different view has been taken was pointed out to me.
17. It is settled law that date on which limitation starts has to be excluded. In this case, the limitation starts on 03.06.2006 Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 27 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:49:31 +0530 so, the 15 days will be completed on 18.06.2006. So, 19.06.2006 will be the date which is relevant for calculating the period as laid down in proviso (c) to Section 138 of NI Act. These factual observations given by the Trial court are correct. I agree to them."
17.4. In view of clear observations laid down in the case of Rambhau Tulsiram Bhusari (supra) it is now settled that in case of returned envelope it is the date on which the envelope is returned "not claimed/unclaimed" and not the date of intimation which is relevant to calculate the period of limitation in filing a complaint u/s 138 NI Act. In the present case, the date on which the envelope was returned with remark "not claimed" is 08.11.2016. Thus, the period of one month for filing this com-
plaint is to be reckoned from 08.11.2016. However, the present complaint has been filed on 22.11.2016 which is prior to the date of accrual of cause of action. Thus, the complaint is pre-mature.
Thus, the fifth legal requirement is adjudicated in favour of accused and against the complainant.
18. All the legal requirements constituting an offence u/s 138 NI Act being cumulative in nature, the fact that the fifth legal requirement has not been proved in favour of complainant, the ingredients necessary to bring home the guilt of accused remain incomplete. Accordingly, accused Kavita Mantosh Prasad is acquitted for the alleged offence u/s 138 NI Act.
Announced in the open Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 28 of 29 Digitally signed by AAKANKSHA AAKANKSHA Date:
2024.05.07 16:49:48 +0530 Digitally signed by AAKANKSHA court on 7th April, 2024. AAKANKSHA Date:
2024.05.07 16:49:42 +0530 (Aakanksha) Metropolitan Magistrate(NI Act)-07 South West District, Dwarka Courts, New Delhi Ct. Case No.5006271/16 Religare Finvest Ltd. Vs Kavita Mantosh Prasad Page 29 of 29