Delhi District Court
Dhurv Mubayi vs Brisk Capital Market Services Ltd. & ... on 28 April, 2016
1
IN THE COURT OF MS PREETI PAREWA : METROPOLITAN
MAGISTRATE - 02 : SOUTH : SAKET COURT : NEW DELHI
Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others
CC No 1432/15
U/s 138 r/w 141 Negotiable Instruments Act
Unique Identification No. : 02406R0032001998
JUDGMENT
(1) Serial number of the case : 1432/15
(2) Name of the complainant : Dhurv Mubayi
R/o 43, Anand Lok, New Delhi
(3) Name of the accused, 1. Brisk Capital Market Services Ltd parentage & residential : 1101, Arunachal Building, address 19, Barakhamba Road, New Delhi-01
2. Chander Kant, Director of Brisk Capital Market Services Ltd 1101, Arunchal Building, 19, Barakhamba Road, New Delhi-01
- proceedings abated vide order dated 06/01/2016
3. Naresh Kumar Aggarwal, Director of Brisk Capital Market Services Ltd 1101, Arunachal Building, 19, Barakhamba Road, New Delhi-01
4. Arminder Sawhney, Director of Brisk Capital Market Services Ltd 1101, Arunachal Building, 19, Barakhamba Road, New Delhi-01
- proceedings dropped vide order dated 17/10/2002
5. Rakesh Nangia, Director of Brisk Capital Market Services Ltd Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 1 of 23 2 1101, Arunachal Building, 19, Barakhamba Road, New Delhi-01
- proceedings dropped vide order dated 17/10/2002 (4) Offence complained of or proved : Section 138 r/w 141 Negotiable Instruments Act, 1881 (5) Plea of the accused no. 1 Brisk Capital Market : Not entered appearance Services Ltd Plea of the accused no. 3 Naresh Kumar Aggarwal, : Pleaded not guilty Director of Brisk Capital Market Services Ltd (6) Final Order : 1. Brisk Capital Market Services Ltd 1101, Arunachal Building, 19, Barakhamba Road, New Delhi-01
-ACQUITTED
3. Naresh Kumar Aggarwal, Director of Brisk Capital Market Services Ltd 1101, Arunachal Building, 19, Barakhamba Road, New Delhi-01
-ACQUITTED (7) Date of Institution : 08/04/1997 (8) Date on which reserved for judgment : 27/04/2016 (9) Date of Judgment : 28/04/2016 FACTS OF THE CASE IN BRIEF
1. The facts of the case, as carved out from the complaint, filed Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 2 of 23 3 through attorney of the complainant, are that the complainant had entered into a Sale Agreement dated 31/01/1996 with accused no. 1 for sale of 40000 equity shares of Worldcom Multi Media Ltd, a public limited company incorporated under the Companies Act, for sale consideration of Rs. 14,21,760/- . That for the payment for the said amount, the accused persons issued a cheque bearing no. 069811 dated 24/02/1997 for a sum of Rs. 14,21,760/- drawn on HSBC Ltd., K G Marg branch (hereinafter the "cheque in question") in favour of the complainant. That the cheque in question on presentation was returned unpaid with endorsement "Account Closed" vide memo dated 24/02/1997 and intimation of the same was received by the complainant on 25/02/1997. That the accused nos. 2 to 5 are the Directors of accused no. 1 and are/were responsible for the conduct of its business. That vide legal notice dated 05/03/1997, sent on 05/03/1997, complainant called upon the accused persons to make the payment of the dishonoured cheque amount with 18% interest per annum from 24/02/1997 within receipt of the notice. That the accused persons failed to make payment of the dishonoured cheque within the statutory period of 15 days and hence, the complainant filed this complaint U/s 138 r/w 141 of Negotiable Instruments Act, 1881 (hereinafter "the Act") against the accused.
PRE-SUMMONING EVIDENCE
2. During pre-summoning evidence, Sh Kishan Mubayi, POA Holder of the complainant examined himself as CW-1. In his examination he Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 3 of 23 4 reiterated the averments made by the complainant in his complaint and relied upon the documents i.e. the cheque in question as ExCW1/1, its return memo as ExCW1/2, proof of intimation received from his banker as ExCW1/3, legal notice dated 05/03/1997 as ExCW1/4, reply to legal notice dated 05/03/1997 sent to the accused persons as ExCW1/5.
Further one Sh Ravinder Kumar Puri, Special Assistant, HSBC, K G Marg branch was examined on behalf of the complainant as CW-2 who produced the statement of accounts of Brisk Capital Pvt Ltd which is ExCW2/1 and outward return cheque register as ExCW2/2.
One Sh C P Singh, Clerk cum Cashier, Union Bank of India was also examined on behalf of the complainant as CW-3 who proved the return memo as ExCW3/1 and statement of accounts of the complainant as ExCW3/2.
Thereafter, pre-summoning evidence was closed by the POA Holder of the complainant vide order dated 24/01/1998.
SUMMONING ORDER
3. Thereafter, on 11/03/1998, after being satisfied that the complainant has a prima facie case against the accused persons, my Ld. Predecessor summoned the accused persons for offence punishable U/s 138 r/w 141 of the Act.
Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 4 of 23 5 NOTICE U/S 251 CRIMINAL PROCEDURE CODE
4. During the pendency of the case, proceedings against accused no. 4 Arminder Sawhney and accused no. 5 Rakesh Nangia were dropped on behalf of the complainant.
Thereafter, notice under Section 251 Cr.P.C. in respect of offences U/s 138 r/w 141 N I Act was served upon the accused no. 2 Chander Kant, Director of Brisk Capital Market Services Ltd and upon accused no. 3 Naresh Kumar Aggarwal, Director of Brisk Capital Market Services Ltd through his Advocate by my Ld. Predecessor vide order dated 25/07/2003. Accused persons pleaded not guilty and claimed trial. None entered appearance on behalf of accused no. 1 Brisk Capital Market Services Ltd. and the company was proceeded U/s 305 (4) CrPC.
Further during the pendency of the case, accused no. 2 Chander Kant expired and proceedings against him were abated vide order dated 06/01/2016.
POST NOTICE COMPLAINANT EVIDENCE
5. In the post notice complainant evidence, the POA Holder of the complainant was examined, cross examined and discharged as CW-1. No other complainant witness was produced and complainant evidence was closed vide order dated 05/10/2011 passed by my Ld. Predecessor. Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 5 of 23 6 STATEMENT OF ACCUSED NO. 3 NARESH KUMAR AGGARWAL
6. The statement of accused no. 3 Naresh Kumar Aggarwal was recorded U/s 313 of the Code of Criminal Procedure ("CrPC" in short) r/w Section 281 CrPC on 03/02/2012 by my Ld. Predecessor.
Accused no. 3 Naresh Kumar Aggarwal stated that the cheque in question was issued prior to his becoming a Director in the accused company and was issued under the instructions of the complainant who was a Director and In-charge of the affairs of the accused no. 1 company at that time. He admitted the factum of dishonour of the cheque, receipt of legal notice by accused company, the fact of sending a reply to the said legal notice by the Advocate of the accused company. He denied existence of any legal liability and stated that the Agreement under which the cheque in question was issued was void in law and no consideration against it was received by the complainant company. He also expressed his desire to lead evidence in his defence.
DEFENCE EVIDENCE
7. In defence evidence, accused no. 3 Naresh Kumar Aggarwal stepped into the witness box and was examined & cross examined as DW-1. Thereafter, defence evidence was closed by my Ld. Predecessor vide order dated 12/12/2013.
Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 6 of 23 7 ARGUMENTS
8. Arguments were advanced by Advocate Ms Kajal Chandra on behalf of the complainant and Advocate Sh Prashant Mehndiratta on behalf of the accused no. 3 Naresh Kumar Aggarwal. Further written submissions were also filed on behalf of the complainant and the accused no. 3 Naresh Kumar Aggarwal for assistance of the Court.
9. Counsel for the complainant submitted that all the ingredients as per Section 138 & 141 of the Act have been fulfilled in the present case. It is further submitted that the cheque in question ExCW1/1 has been duly signed by the authorized signatories of the accused company who were duly authorized vide Board Resolution dated 28/06/1995 ExDW1/4. She has also argued that vide Board Resolution dated 17/05/2004, the accused no. 1 company has authorized Sh Navodit Narayan to execute the sale agreement and purchase agreement on behalf of accused no. 1 company. It has also been argued on behalf of the complainant that in the reply to the legal notice ExCW1/5, accused no. 1 company has admitted the execution of the two agreements and issuance of the cheque in question on behalf of the accused company. Another line of argument in support of the complainant's case is that the accused no. 3 was responsible for the day to day affairs of the accused no. 1 company and the cheque in question was issued in discharge of legally enforceable liability of the accused company. Counsel for the Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 7 of 23 8 complainant has relied upon the judgements of :
1. Vinay Patni vs State of UP 2013 (1) DCR 209
2. NEPC Micon Ltd and others vs Magma Leasing Ltd. 1999 Cri.L.J. 2883
3. Thirumala Agencies and other vs Samala Mareppa and Sons II (2001) BC 105
4. J Krishna Nayar vs T Jaseentha and another 1998 Cri.L.J. 3913
5. Vardhman India Products vs Sulkshan Luthra 2013 (1) DCR 203
6. Sandhu Ram Singla vs State & Others 2002 Cri.L.J. 2760
7. SMS Pharmaceuticals Ltd vs Neeta Bhalla & Anr. (2007) 4 SCC 70
8. Manish Parwani vs NCT of Delhi & Anr. 169 (2010) DLT 522
9. Nipam Kotwal & Ors. Vs Dominos Printec India Pvt Ltd. 146 (2008) DLT 747
10.K S Subbaraman vs Iyyammal 1999 (2) Crimes 11
11.Y Vijayalakshmi @ Rambha vs Manickam Narayanan 2005 Cri. L. J. 3572
12.K M Maregowda vs M/s Seven Hills Ex-Import Corporation, Bangalore 2004 Cri. L. J.
10. Per contra, counsel for the accused no. 3 Naresh Kumar Aggarwal has submitted that no valid Power of Attorney was executed in favour of Kishan Mubayi by the complainant Dhurv Mubayi. It is further argued that accused no. 1 company was never served with notice and despite being informed on 17/10/2002 that the accused company was in the Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 8 of 23 9 custody of Bombay High Court as custodian was appointed by the High Court of Bombay under the Special Courts (trial of offences relating to transactions and securities) Act 1922, no steps were taken by the complainant to make the custodian of accused no. 1 company as a party in the present case. It is further submitted that the complainant has hidden material facts in the complaint as he was aware that the bank account of the accused company in HSBC has been closed and he malafidely presented the cheque in question. It is also argued on behalf of the accused that the signatories of the cheque in question have not been made a party in the complaint, which also reflects the malafide intention of the complainant. It has also been argued that there was no valid consideration for issuance of the cheque in question as Mr S P Singh did not have any authority or any resolution passed by the Board of Directors in his favour to enter into sale and purchase agreement of shares on behalf of the accused company. Another line of argument is that only general allegations have been levelled against all the Directors of the accused company in the complaint which is not sufficient to prove that accused no. 3 Naresh Kumar Aggarwal was incharge of conducting day to day business of the accused company. It has also been argued that the sale & purchase agreement of shares is void and thus, cannot be legally enforced. Counsel for the accused has relied upon the judgements of :
1. SMS Pharmaceuticals Ltd vs Neeta Bhalla & Anr. decided on 20/09/2005
2. National Small Industries Corporation Ltd vs Harmeet Singh Paintal & Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 9 of 23 10 Anr. decided on 15/02/2010
3. Crl. M C No. 1713/2011 titled Virender Kumar Aggarwal and Another vs M/s VIP Power Projects Pvt Ltd decided on 20/04/2012 LEGAL POSITION
11. In order to prove an offence under Section 138 N I Act, following ingredients are required to be fulfilled :
i)That there is legally enforceable debt or liability;
ii)The drawer of the cheque issued the cheque to discharge in part or whole the said legally enforceable debt or liability,
iii)The cheque so issued was returned unpaid by the banker of the drawer.
iv)Legal demand notice was served upon the accused and the accused failed to make the payment within 15 days of the receipt of the said notice.
12. It is a well-settled position of law that when a negotiable instrument is drawn, two statutory presumptions arise in favour of the complainant, one under Section 139 and other under Section 118 (a) of the Act. The court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case to act upon the supposition that the Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 10 of 23 11 consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. (Reliance placed on M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC 39).
13. Under the scheme of the Act, if the person committing an offence U/s 138 of the Act is a company; by application of Section 141 of the Act, it is deemed that every person who is incharge of and responsible to the company for conduct of the business of the company as well as the company are guilty for the offence. A person who proves that the offence was committed without his knowledge or that he had exercised all due diligence is exempted from becoming liable by operation of the proviso to Sub Section 1 of Section 141 of the Act. The burden in this regard has to be discharged by the accused. (Reliance placed on S V Muzumdar vs Gujarat State Fertilizers Company Ltd. AIR 2005 SC 2436).
14. From a perusal of Section 141 of the Act, three categories of persons can be discerned, who could be brought within the purview of the penal liability through the legal fiction envisaged in the said Section and they are :
1. The company which committed the offence;
2. Everyone who is incharge of and is responsible for the business of the company; and
3. Any other person who is a Director or a Manager or a Secretary or Officer of the company with whose connivance Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 11 of 23 12 or due to whose negligence, the company has committed the offence.
When the company is the drawer of the cheque, such company is the principal offender, and the remaining persons are made offenders by virtue of the legal fiction created by the Legislature as per the said Section. The actual offence should be committed by the company and then alone the other two categories would also become liable for the said offence. (Reliance placed on Anil Handa vs Indian Acrylic Ltd. AIR 2000 SC 145).
15. The Hon'ble Supreme in the case of National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330, after reviewing all its earlier judgments summarized the legal position as follows:
"39. From the above discussion, the following principles emerge:
(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction.
(ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company.
Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 12 of 23 13
(iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.
(iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred.
(v) If the accused is a Managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.
(vi) If the accused is a Director or an officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in the complaint.
(vii) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases."
From the plain reading of the aforesaid provision, it is evident that every person who at the time the offence is committed is in charge of Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 13 of 23 14 and responsible to the company shall be deemed to be guilty of the offence U/s 138 N I Act.
APPLICATION OF LAW TO THE FACTS OF THE CASE
16. At the outset, the contention raised by the counsel for accused no. 3 Naresh Kumar Aggarwal that the accused no. 1 company was never served with the summons and despite the knowledge of the fact that the accused company was in the custody of Bombay High Court as custodian was appointed by the High Court of Bombay under the Special Courts (trial of offences relating to transactions and securities) Act 1922, no steps were taken by the complainant to make the custodian of accused no. 1 company as a party in the present case requires to be dealt with.
Record reveals that accused no. 2 Chander Kant was the Director and Chairperson of accused no. 1 M/s Brisk Capital Market Services Ltd and he entered his first appearance before the appointment of the custodian by the Hon'ble Bombay High Court in the present case. Since a company is a juristic person, corporate veil has to be lifted and considering the fact that the chairperson and director of the accused no. 1 company had within his knowledge that the present complaint was pending against accused no. 1 company, it cannot be said that the accused no. 1 company was not served and complainant did not take steps for impleading the accused company as a party in the present case. Thus, the argument that the accused no. 1 company remained unserved/steps were not taken by the Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 14 of 23 15 complainant for impleading the custodian of accused no. 1 as a party in the present case holds no water.
17. Also another contention which requires to be dealt at the outset is the issue raised on behalf of accused no. 3 Naresh Kumar Aggarwal that the signatories of the cheque in question have not been made a party in the present complaint. It is the prerogative of the complainant to array the signatories of the cheque in question as an accused in a complaint case U/s 200 CrPC. Thus, the non arraying of the signatories of the cheque in question as accused in the present case will not prove to be fatal to the case of the complainant.
18. Another issue raised in the present case is regarding the validity of the Power of Attorney executed in favour of Kishan Mubayi in the present case.
A. The Hon'ble Supreme Court in M/s Essen Corporate Services Pvt Ltd AIR 2015 Supreme Court 882 while dealing with the issue at hand has held that filing of complaint petition U/s 138 of the Act through Power of Attorney is perfectly legal and competent. Further it has been held that Power of Attorney holder can depose and verify on oath before the court in order to prove the complaints of the complainant. However, the Power of Attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 15 of 23 16 transactions. It has been further held that it is required by the complainant to make specific assertion as to the knowledge of the Power of Attorney holder in the said transaction explicitly in the complaint and the Power of Attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case.
B. Section 7 of Negotiable Instruments Act defines payee "as the person named in the instrument to whom or to whose order the money by the instrument is directed to be paid". In the present case, Dhurv Mubayi is the payee of the cheque in question and no assertion has been made in the complaint, express or implied, by the complainant that the Power of Attorney holder was aware about the transactions personally. Furthermore, the complainant himself was a material witness in the present case, which has penal consequences and non examination of the complainant himself as a witness will go to the root of the matter and render the case of the complainant weak.
C. It is pertinent to mention here that during pre-summoning evidence, the complainant did not depose regarding the execution of Power of Attorney by the complainant in his favour. Thereafter, during the cross examination held on 21/07/2009, the POA Holder of the complainant deposed that the GPA executed earlier in his favour was lost and was not traceable and placed on record another GPA dated 20/12/2005 ExCW1/1. The said GPA is general in nature and does not confer any authority on Sh Kishan Mubayi Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 16 of 23 17 for filing any criminal complaint and to appear as a witness and testify regarding the transaction in question. Therefore, this Court holds that there was no valid authority/attorney in favour of Sh Kishan Mubayi to file the instant complaint and to depose as a witness in the present case and on this account alone, the present complaint requires to be rejected at the threshold.
19. Furthermore, the cheque in question in the instant case is drawn on account of accused no. 1 Brisk Capital Market Services Ltd & others. Accused nos. 2 to 5 are alleged to be the Directors of accused no. 1 and there is a basic averment that all the Directors were responsible for the day to day affairs of the accused company.
20. One of the essential ingredients for proving an offence U/s 138 N I Act is the sending the legal notice of demand. The POA Holder of complainant (CW-1) in his evidence has testified that the legal notice dated 05/03/1997 ExCW1/4 was dispatched on 05/03/1997 by post and a reply to the same dated 20/03/1997 ExCW1/5 was also received by the accused no. 1 company. The accused no. 3 Naresh Kumar Aggarwal has disputed the service of legal notice upon him. Section 114 of Evidence Act, 1872 is applicable to communications sent by post and it enables the court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the General Clauses Act envisages that when a registered notice is posted, it is Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 17 of 23 18 presumed to have been served unless rebuttal is given. The complainant in evidence has placed on record the reply to the legal demand notice sent by accused no. 1 company ExCW1/5. At the time of receipt of the legal notice to demand ExCW1/4 on the accused no. 1 company, accused no. 3 Naresh Kumar Aggarwal was also one of the Directors of the accused company as reflected from the Minutes of Meeting of the accused no. 1 company placed on record by the accused. Thus, the service of legal notice of demand ExCW1/4 on the accused no. 1 company shall be deemed to be service on its Directors at that point of time and therefore, this Court holds that the legal notice ExCW1/4 was duly served on accused no. 1 M/s Brisk Capital Market Serives Ltd & accused no. 3 Naresh Kumar Aggarwal.
21. The scope of Section 138 of the Act covers cases where the ascertained or crystallized debt or other liability exists on the date the cheque is presented. Needless to say that the presumption in favour of existence of consideration exists unless & until after considering the matter before it, Court believes consideration does not exist. It is one of the essential ingredients of the offence punishable U/s 138 N I Act that the dishonored cheque must have been given for payment of money for the discharge, whole or in part of a legally enforceable debt or other liability.
22. It is the case of the complainant that the cheque in question was issued in discharge of the liability arising from sale agreement dated 31/01/1996 ExCW1/2 and purchase agreement dated 24/01/1996 ExCW1/2A. Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 18 of 23 19 As per the sale agreement ExCW1/2, the complainant and the accused no. 1 company agreed to purchase 40000 equity shares of World Com Multi Media Ltd on 24/02/1997 at a price of Rs.35.544 per share or on such earlier date and as such price as may be agreed between the complainant and the accused no. 1 company. The said agreement on face is based on a contingent event i.e. on the purchase of 40000 equity shares and admittedly the cheque in question was post dated when handed over to the complainant.
23. In M/s Collage Culture & others vs Apparel Export Promotion Council and others 2007 [4] JCC [N I] 388, the Hon'ble Delhi High Court has observed that a post dated cheque may be issued under two circumstances. Under circumstance one, it may be issued for a debt in presenti but payable in future. Under second circumstance, it may be issued for a debt which may become payable in future upon the occurrence of a contingent event.
Also highlighting the difference between the above stated two circumstances, the Hon'ble High Court of Delhi has held that the word 'due' means 'outstanding at the relevant date' and further has held that the debt has to be in existence as a crystallized demand akin to liquidated damages and not a demand which may or may not come into existence ; coming into existence being contingent upon the happening of an event.
Further, it is pertinent to note here that categorically in the above stated judgment, the Hon'ble High Court has held that a post dated cheque for a debt due but payment postponed at a future date would attract Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 19 of 23 20 Section 138 of Negotiable Instruments Act, 1881 but the cheque issued not for an existing due, but issued by way of a security would not attract Section 138 of Negotiable Instruments Act, 1881.
24. In the present case, the complainant has averred that the cheque in question was given for sale consideration of Rs.14,21,760/-. There is no document on record to reflect that the 40000 equity shares as agreed to be purchased were in-fact purchased by the accused no. 1 company nor there is any averment in the complaint regarding the same or any evidence on this aspect has been led by the complainant. The very agreement ExCW1/2A is based on a contingency which was to be averred and proved by the complainant.
During the cross examination of the POA Holder of the complainant (CW-1) conducted on 17/02/2010, he deposed that he did not remember the certificate number and distinctive numbers of the World Com Multi Media shares. He further deposed that he had received 40000 share certificates and the same has been acknowledged at point A & B of ExCW1/DX. He also deposed that he did not know the rate of shares of World Com Multi Media as on 25/04/1997 as it was not a listed company. Therefore, from the testimony of the POA Holder of the complainant, it can be said that the actual purchase of the alleged shares did not take place and thus, the said agreement ExCW1/2A became void when the contingency did not happen. Further, the complainant did not enter the witness box to testify regarding this aspect nor any other witness was produced by the Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 20 of 23 21 complainant to the factum of actual purchase of alleged shares by the accused no. 1 company. Therefore, for these reasons, this Court is of the opinion that the cheque in question which was allegedly issued in discharge of the liability arising out of the sale/purchase agreement cannot be said to have been issued in discharge of any legally enforceable debt or liability, when the purchase itself did not occur or the purchase could not have occured owing to the de-listing of the company whose shares were to be purchased by the accused no. 1 company.
25. Since one of the essential ingredients of principal offence U/s 138 of the Act i.e. the issuance of the cheque in question in discharge of lawful liability or debt, is not attracted in the present case, the issue of vicarious liability of the accused no. 3 Naresh Kumar Aggarwal, Director of principal offender, accused no. 1 M/s Brisk Capital Market Services Pvt Ltd need not be gone into. Even otherwise, no specific role has been proved to have been played by accused no. 3 Naresh Kumar Aggarwal in the capacity of a Director of the accused company for fastening vicarious liability U/s 141 of the Act which requires strict construction.
26. It is also pertinent to mention here that the account on which the cheque in question is drawn was closed by the accused no. 1 company on 19/09/1996 which was discussed by the Board of Directors of the accused company in the meeting held on 30/11/1996 and confirmed by way of meeting dated 06/01/1996 ExDW1/7 wherein the POA Holder of the Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 21 of 23 22 complainant was also present. Therefore, the fact that the said account has been closed by the accused no. 1 company before the presentation of the cheque in question was well within the knowledge of the POA Holder of the complainant and instead of requesting/demanding a new cheque for the said amount, the complainant presented the same. This fact also casts a shadow of doubt on the story of the complainant.
27. Therefore, for the above stated reasons, this Court comes to a finding that one of the essential ingredients i.e. the issuance of the cheque in question in discharge, whole or in part, of a legally enforceable debt or liability in order to prove offence U/s 138 r/w 141 of the Act is not attracted in the instant case. Resultantly, this Court finds accused no. 1 M/s Brisk Capital Market Services Ltd and accused no. 3 Naresh Kumar Aggarwal not guilty for the said offence and consequently, they stand acquitted for the said offence.
28. Further accused accused no. 3 Naresh Kumar Aggarwal is directed to furnish bail bond and surety bond in the sum of Rs.50,000/- U/s 437(A) CrPC and is directed to be present before the Ld. Appellate Court as and when notice is served upon him. Bail bond furnished, considered and accepted for 06 months from today.
Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 22 of 23 23
29. File be consigned to Record Room after due compliance. Announced in the open court on 28/04/2016 (PREETI PAREWA) Metropolitan Magistrate-02/N I Act/South Saket Court/New Delhi/28/04/2016 Certified that this judgment contains 23 pages and each page bears my signature.
(PREETI PAREWA) Metropolitan Magistrate-02/N I Act/South Saket Court/New Delhi/28/04/2016 Dhurv Mubayi vs Brisk Capital Market Services Ltd. & others CC No. 1432/15 Page 23 of 23