Delhi District Court
Britelite Media Pvt. Ltd vs Sushil Kumar Bubna on 7 January, 2025
IN THE COURT OF SH. ABHISHEK GOYAL, ADDITIONAL
SESSIONS JUDGE-03, CENTRAL DISTRICT, TIS HAZARI
COURTS, DELHI
CNR No.: DLCT01-014242-2023
CRIMINAL APPEAL No.: 246/2023
1. M/s. BRITELITE MEDIA PVT. LTD.,
Office at; 30/15, Cassia Road,
Shipra Suncity, Indirauram,
Ghaziabad, Uttar Pradesh.
2. JAVED AKHTER,
Director, M/s. Britelite Media Pvt. Ltd.,
Office at; 30/15, Cassia Road,
Shipra Suncity, Indirauram,
Ghaziabad, Uttar Pradesh. ... APPELLANT
VERSUS
SUSHIL KUMAR BUBNA,
Proprietor, M/s. Bubna Advertising,
4272/3, Ansari Road,
Darya Ganj, New Delhi-110002. ... RESPONDENT
Date of Institution : 07.10.2023
Date when judgment was reserved : 29.11.2024
Date when judgment is pronounced : 07.01.2025
JUDGMENT
1. The present appeal has been preferred under Section 374 of the Code of Criminal Procedure, 1973 (hereinafter, referred to as 'Cr.P.C.') against the judgment dated 07.08.2023 (hereinafter referred to as 'impugned judgment'), passed by learned Metropolitan Magistrate (NI Act)-02/Ld. MM (NI Act)-02, Central, Tis Hazari Courts, Delhi (hereinafter referred to as the 'Ld. Trial Court/Ld. MM') in case bearing; "Sushil Kumar Bubna v. M/s. Britelite Media Pvt. Ltd., CC. No. 6632/2017", convicting the appellants for the offence punishable under Section 138 Negotiable Instrument Act (hereinafter referred to as 'NI Act') and CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 1 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:31:35 +0530 the consequent order of sentence dated 14.09.2023 (hereinafter referred to as 'impugned order'), passed by the Ld. Trial Court, awarding the appellant no. 2, simple imprisonment for a period of 03 (three) months and compensation/fine to the tune of Rs. 10,14,235.20/- (Rupees Ten Lakhs Fourteen Thousand Two Hundred and Thirty Five and Twenty paise only) along with interest at the rate of 9% (nine percent) per annum on the said amount from the date of filing of the complaint, i.e., on 11.05.2017 till the date of judgment dated 07.08.2023, to be paid by the appellants (appellant nos. 1 and 2), jointly and severally to the respondent/complainant, in default of payment of compensation, appellant no. 2 was further directed to undergo simple imprisonment for a further period of 03 (three) months (hereinafter impugned judgment and impugned order are collectively referred to as the 'impugned judgment and order'). 2.1. Succinctly, the genesis of the present proceedings is the complaint, filed by/on behalf of the respondent/complainant, though its Special Power of Attorney Holder/SPA Holder, namely, Ankur Wadhwani, before the Ld. Trial Court in terms of the provisions under Section 138 of NI Act. Under the said complaint, it was inter alia contended that the complainant/respondent dealt in advertising and media promotion through Newspapers, Radio, Television, event organization, etc., under the name and style of M/s. Bubna Advertising. It is further averred in the complaint that the accused/appellant approached the respondent for advertising of products of his client as well as promotion of their products through newspaper, radio and print modes, etc. as well as for sponsorship of events for promotional activities, against purchase orders. As per the respondent, it used to regularly maintain account books and during the course of business, sum of Rs. 18,42,007/-
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ABHISHEK Digitally signed by
ABHISHEK GOYAL
GOYAL Date: 2025.01.07 16:31:41
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(Rupees Eighteen Lakhs Forty Two Thousand and Seven only) was due and outstanding against the appellant as on 31.12.2016 in the respondent's account books, avowed to be duly maintained by the respondent during the course of business. Relevantly, as per the respondent, appellant made two payments of sum of Rs. 2,00,000/- (Rupees Two Lakhs only) and Rs. 4,00,000/- (Rupees Four Lakhs only), both, through RTGS modes on 02.02.2017 and 03.01.2017, respectively. Correspondingly, as per the complaint, upon payment of said amount, sum of Rs. 12,42,007/- (Rupees Twelve Lakhs Forty Two Thousand and Seven only) was due and outstanding against the appellant on 31.03.2017. As per the respondent, in discharge of part liability towards the respondent for the work done as per the order of the appellant, the appellant issued cheque bearing no. 392285, dated 31.12.2016 for a sum of Rs. 10,14,235.20/- (Rupees Ten Lakhs Fourteen Thousand Two Hundred and Thirty Five and Twenty paise only), drawn on PNB, Kaushambi Branch, Ghaziabad, UP (hereinafter referred to as the 'dishonoured cheque/cheque in question'). It is further averred by the respondent that the appellant had assured that the said cheque would be honored on presentation. However, when the cheque in question/said cheque was presented by the respondent for encashment with his banker, i.e., HDFC Bank, Darya Ganj branch, Delhi, the same was returned unpaid for the remarks, "Insufficient Funds". Consequently, the respondent is asserted to have issued an email dated 02.03.2017 to the appellant on his email address, i.e., [email protected], however, the appellant is asserted to have avoided payment of the same for one or the other reasons. Subsequently, the respondent issued a legal demand notice dated 29.03.2017 to the appellant under Registered AD cover and speed post, however, neither any payment was made by the appellant nor CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 3 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:31:46 +0530 the legal notice, replied. Ergo, under such circumstances, the respondent filed the aforenoted complaint in terms of the provisions under Section 138 NI Act against the appellants herein. 2.2. Notably, consequent upon pre-summoning evidence by way of affidavit having been tendered by the SPA holder of the respondent and thereupon, Ld. Trial Court's taking cognizance of the offence on 24.05.2017, summons were issued to the appellant/accused. Subsequently, upon the appellants entering appearance before the Ld. Trial Court, notice under Section 251 Cr.P.C. was framed against the appellants vide order dated 12.09.2018, to which, the appellants plead not guilty and claimed trial. Relevantly, during the course of trial, the SPA Holder of the respondent examined himself as CW-1, while adopting his pre- summoning evidence/ evidence by way of affidavit (Ex. C-1) as well as, relying upon the documents, i.e., original SPA dated 09.05.2017 (Ex. CW1/1); copy of radio media purchase orders (Ex. CW1/2 (Colly.)); true copy of attested ledger for the year 2015-16 & 2016-17 (Ex. CW1/3); two CDs pertaining to ledger (Ex. CW1/4); Original bills from 19.10.2015 till 12.12.2016 (Ex. CW1/5 to Ex. CW1/36); original credit notes (Ex. CW1/37 to Ex. CW1/49); cheque bearing no. 392285, dated 31.12.2016 for a sum of Rs. 10,14,235.20/- (Rupees Ten Lakhs Fourteen Thousand Two Hundred and Thirty Five and Twenty paise only), drawn on PNB, Kaushambi Branch, Ghaziabad, UP (Ex. CW1/50); cheque dishonour memo dated 01.03.2017 (Ex. CW1/51); email exchange between the respondent and appellant (Ex. CW1/52 (Colly.)); legal demand notice dated 29.03.2017 (Ex. CW1/53); postal receipts (Ex. CW1/54 to Ex. CW1/57); delivery and tracking reports of the legal demand notice (Ex. CW1/58 to Ex. CW1/61); and certificate under Section 65B of the Indian Evidence Act, 1872/Evidence Act CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 4 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 (Ex. CW1/62). Subsequently, on conclusion of respondent's evidence, recording of statement of the appellants under Section 313/281 Cr.P.C. on 31.01.2020, as well as on conclusion of arguments on behalf of the parties, as aforementioned, the Ld. Trial Court vide impugned judgment and order, while holding the appellants guilty of the offence punishable under Sections 138 NI Act, sentenced them in the manner, as noted hereinabove. 3.1. Learned Counsel for the appellants vehemently contended that the impugned judgment and order were passed by the Ld. Trial Court on mere conjunctures, surmises and in contravention of the settled principles of law, deserving their setting aside at the outset. In this regard, it was outrightly submitted that there is no legally enforceable debt and/or liability whatsoever due towards the respondent by the appellants. Even otherwise, as per the Ld. Counsel, the complaint filed by the respondent is grossly mala fide, misleading and frivolous. It was further submitted that the Ld. Trial Court failed to appreciate that there must be subsisting liability or debt on the date, when the cheque was issued/delivered, however, in the instant case, neither any legally enforceable debt or liability existed/subsisted on the issuance of cheque in question or on the date of its presentation. As per the Ld. Counsel, the cheque in question was issued as a post-
dated cheque/security in the month of November 2016 for the work to be conducted by the respondent in December 2016, as also specified under email correspondence dated 07/08.11.2016. However, it was contended, since the entire activity was not performed by the respondent, no question of existing debt or liability is established in the instant case. Further, as per the Ld. Counsel, the basis of the complaint in question is self made ledger accounts and some invoices, which has no validity under law, as CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 5 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:31:55 +0530 also reflected from the entries of the year 2015, whereas appellant no. 1, admittedly, came into existence in March 2016, demonstrating that the basis of the present complaint is forged and fabricated documents. Even otherwise, the ledger and transaction invoices have not even been certified by any competent accountant, rather, the same have been certified by attorney himself, who is neither an account person nor does he possess requisite knowledge of established accounting procedure. Ld. Counsel further submitted that the evidence of attorney in the present case, cannot even otherwise, be considered to be valid unless he has personal knowledge or the transaction and personally involved in the procedure. However, in the instants case, the attorney of the respondent himself disclosed that he was from sales department of the complainant/respondent's organization and not from accounts department, besides the said attorney is neither privy to any of the correspondences/emails nor marked thereon to prove/depose of the contents thereof.
3.2. Learned Counsel for the appellants further vehemently argued that the Ld. Trial Court was oblivious to the fact that the appellants have successfully rebutted the presumption which existed in favour of the respondent during the cross examination of CW-1. It was further contended that the Ld. Trial Court also failed to appreciate that the in the respondent's cross- examination, the appellant was able to rebut the presumption of 139 NI Act and had further put forward his/appellant's case/defence, as mandated under law on preponderance of probabilities. Further, as per the Ld. Counsel, the impugned judgment is erroneous on the face of it to the effect that the facts which were not even pleaded by the complainant/respondent, not even mentioned in the complaint, were incorporated/introduced in CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 6 of 44 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:31:59 +0530 the impugned judgment, which is not tenable under law. Ld. Counsel further vehemently argued that appellant no. 1 is a separate legal entity and alleged liability of proprietorship concern of appellant no. 2 cannot be fastened/merged into the alleged liability of appellant no. 1. It was further submitted that it was never the case of the respondent that Britelite Media Corp.'s alleged liability was ever agreed to be merged in the alleged liability of appellant no. 1 company by appellant no. 2. Further, as per the Ld. Counsel for the appellants, appellant no. 2 never agreed or consented for merger of any alleged past liability of his other proprietorship concern with appellant no. 1. As per the Ld. Counsel, email dated 14.11.2016, relied upon by the respondent was actually, answer/reply from appellant no. 2 to the query posed by the respondent on the same day. However, as per the Ld. Counsel, the respondent surreptitiously concealed/suppressed the trailing email and only filed the email of appellant no. 2, solely to mislead the Ld. Trial Court in order to obtain a favourable order.
Even otherwise, as per the Ld. Counsel, the cheque in question was issued for a particular liability and could not have been used against any other liability, has been done in the instant case, rendering the proceedings bad in law.
3.3. Learned Counsel for the appellants further submitted that the impugned judgment is manifestly erroneous in as much as the same wrongly records that appellant no. 2 did not reply to the legal notice of the complainant to show his bona fides. However, as per the ld. Counsel, same is contrary to the material placed on record by respondent himself and also admitted fact of the complainant that appellant no. 2 immediately replied to the email dated 02.03.2017 of the respondent/complainant, informing the appellant of dishonour of cheque. Even otherwise, from a CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 7 of 44 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:32:03 +0530 scrupulous analysis of the documents placed on record, as per the Ld. Counsel, it would be explicit that the instant complaint was filed by the complainant/respondent beyond the statutory prescribed period of limitation, making the same liable to be rejected on this sole ground. In the alternate, presuming that the notice was duly issued by the respondent to the appellants herein, same was delivered to the appellant beyond a period of thirty days, as prescribed under law, vitiating the entire trial proceedings. Correspondingly, as per the Ld. Counsel, the Ld. Trial Court failed to even look into the material placed on record by the complainant himself, much less, consider the same before passing the impugned judgment. In this regard, Ld. Counsel further submitted that there are admitted documents, filed by the complainant, which are against the complainant/respondent and in favour of the appellants herein. As per the Ld. Counsel, had the Ld. Trial Court considered the said documents, placed on record by the complainant himself, the impugned judgment would not have been passed against the appellants. Further, as per the Ld. Counsel emails dated 08.11.2016, 28.12.2016 and 02.02.2017 make it abundantly clear that the appellant in bona fide manner and as a part of accepted general practice of commercial/business transactions, informed the respondent about the actual payment made to the respondent for the work done, in lieu of the cheque in question, etc., which was never refuted by the respondent. As per the Ld. Counsel. Since the respondent never refuted/disputed/objected to the said emails of the appellant, thus, acquiesced and admitted to the contents thereof. Ld. Counsel further submitted that the Ld. Trial Court further failed to appreciate that almost 50% (fifty percent) of the cheque amount was paid by the appellant before the same was presented for CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 8 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:32:07 +0530 encashment, which can be exhibited from the documents filed by the complainant/respondent. Accordingly, Ld. Counsel submitted that not only did the Ld. Trial Court failed to consider the truth of circumstances and passed the impugned judgment in haste, rather, did not properly appreciate/examine the facts of the present case, wrongly holding the appellant guilty of the aforementioned offences. Even otherwise, as per the Ld. Counsel, the impugned order on sentence was passed by the Ld. Trial Court, inconsiderate of the correct factual scenario, passing exorbitant sentence and order of compensation against the appellants, besides no sentence of imprisonment, as per the Ld. Counsel, could have been passed by the Ld. Trial Court against appellant no. 2 herein, especially when appellant no. 1 was directed to pay only compensation. Consequently, the Ld. Counsel inter alia prayed that the present appeal be allowed, and the impugned judgment and order be set aside, and the appellant be acquitted of the alleged charges. In support of the said contentions, reliance was placed upon the decisions in; Indus Airways Pvt. Ltd. v. M/s. Magnum Aviation Pvt. Ltd., (2014) 2 Crimes 105 (SC); SIL Import, USA v. Exim Aides Silk Exporters, Bangalore, (1999) 4 SCC 567; K. R. Indira v. Dr. G. Adinarayana, (2003) 8 SCC 300; Suman Sethi v. Ajay K. Churiwal & Anr., (2000) 2 SCC 380; Uniplas India Ltd. & Ors. v. State (Govt. of NCT of Delhi) & Anr., (2001) 6 SCC 8; Industrial Credit & Development Syndicate now called ICDS Ltd. v. Smithaben H. Patel, (1999) 3 SCC 80; M. Tech Developers Pvt. Ltd. v. State of NCT of Delhi & Ors., SLP(Crl.) No. 15/2019, dated 30.07.2019 (SC); Pandurang Dhondhi Chougule & Ors. v. Maruti Hari Jadhav & Ors., (1966) 1 SCR 102; Mohinder Singh Gill v. Chief Election Commissioner, (1978) 1 SCC 405; Pawan Kumar Ralli v. Maninder Singh Narula, Crl. Appeal No. CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 9 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:32:11 +0530 1684/2014, dated 11.08.2014 (SC); Maninder Singh Narula v. Pawan Kumar Ralli, Crl. MC No. 2961/2012, dated 15.01.2013 (DHC); Sarabjit Singh v. State NCT of Delhi, Crl. MC No. 2856/2015, dated 08.10.2015 (DHC); John K. Abraham v. Simon C. Abraham & Anr., (2014) 2 SCC 236; Sudesh Kumar v. State of UP & Anr., Neutral Citation: 2024:AHC:38337; A. Seating v. Nandini Modulars, 2022 SCC Online Kar. 725; Brushman India Ltd. & Anr. v. State & Anr., 2018 SCC Online Del. 12499; Mukesh Sharma v. Satbir Singh, 2015 SCC Online Del. 11347; and Ganesh Kumar G. & Ors. v. Nandini Modulors, 2022 SCC Online Kar.
725. 4.1. Per contra Ld. Counsel for the respondent submitted that the impugned judgment and order were passed by the Ld. Trial Court after due appreciation of the facts and circumstances of the case as well as in consonance with the settled judicial precedents. As per the Ld. Counsel, grounds of appeal in the instant case are falsely created and based on a concocted story. On the contrary, as per the Ld. Counsel, the order passed by the Ld. Trial Court are correct and the appellants were correctly convicted and sentenced. It was further contended that the testimony of the SPA Holder of the complainant/CW-1 has not only been consistent, rather, lucidly points towards the only inference of guilt of the appellant. As per the Ld. Counsel, the respondent fairly proved his complaint and the ingredients of the offence under Section 138 NI Act. Further, the appellants, as per the Ld. Counsel, were not able to rebut the presumption under Section 139 NI Act in the instant case. It was further submitted that the SPA holder of the complainant was fully conversant with the facts of the case, as well as able to depose on behalf of the complainant. In this regard, Ld. Counsel further submitted that even during the cross-examination by the counsel of CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 10 of 44 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:32:15 +0530 the appellant, said SPA Holder specifically deposed that he dealt with other company, i.e., Vishnu Pouch Packaging Pvt. Lts. and that he had also dealt with Saloni Oils, which were the clients of the appellant, proving that the said SPA Holder personally dealt with the said clients of the appellants and also handled orders placed by the appellants personally, being conversant with the transaction involved.
4.2. Learned Counsel for the respondent further submitted that admittedly both the respondent as well as the appellant were in business relationship and the complainant duly maintained a ledger account during the course of business, wherein the particulars of transaction between the appellant and respondent was duly recorded. Further, as per the Ld. Counsel, the appellant, even at the stage of framing of notice under Section 251 Cr.P.C., admitted that the dishonoured cheque was issued by appellant no. 2, however, pleaded that the same was issued as security. Even otherwise, as per the Ld. Counsel, where the appellant pleads that the documents produced by the complainant/respondent were forged/manipulated, onus was on the appellant to rebut the same in terms of the provisions under Section 103 of the Evidence Act. However, in the present case, as per the Ld. Counsel, neither any evidence/documents produced by the appellant nor any witness/defence evidence forthcoming to belie the case of the respondent. Correspondingly, as per the Ld. Counsel the appellants opted not to even reply to the legal demand notice dated 29.03.2017 or to produce any ledger account to demonstrate that the appellants owed no liability towards the complainant/respondent. In so far as the aspect of limitation in filing the complaint in the instant case is concerned, Ld. Counsel for the respondent strenuously contended that no such CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 11 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:32:20 +0530 defence/argument was raised by/on behalf of the appellants before the Ld. Trial Court. Even otherwise, as per the Ld. Counsel, the said emails were never sent by the respondent himself, rather, the emails in question were mere general correspondence between the employees of the complainant/respondent and the appellants. In this regard, Ld. Counsel further submitted that the issue of limitation is a mixed question of fact as well as law, which cannot be raised by the appellants for the first time in the present proceedings. Further, as per the Ld. Counsel, the email correspondence dated 02.03.2017 does not amount to legal notice, in strict sense, as envisaged under Section 138 NI Act. Ld. Counsel strenuously reiterated that the facts and circumstances put forth as well as the evidence placed on record, unerringly point out towards the guilt of the appellants and that no fault can be attributed to the findings of the Ld. Trial Court, which are based on proper appreciation of facts as well as law. Accordingly, Ld. Counsel for the respondent submitted that the present appeal deserves to be dismissed at the outset, as grossly malicious and devoid of merits. In support of the said contentions, reliance was placed upon the decisions in; Rajesh Jain v. Ajay Singh, SLP (Crl.) No. 12802/2022, dated 09.10.2023 (SC); D.K. Chandel v. M/s. Wockhardt Ltd., Crl. Appeal No. 132/2020, dated 20.01.2020 (SC); Kishan Rao v. Shankargouda, AIR 2018 SC 3173;
Kushalbhai Mahojibhai Patel v. A Firm of Mohmodhussain Rahimbux, AIR 1981 SC 977; Anneta Hada v. M/s. Godfather Travels & Tours Pvt. Ltd., AIR 2012 SC 2795; Padmini Polymers Ltd. v. Unit Trust of India, 2003 Cri.LJ 1053; V.S. Yadav v. Reena, Crl. Appeal No. 1136/2010, dated 21.09.2010 (DHC); Suresh Chandra Goyal v. Amit Singhal, Crl. L.P. 706/2014, dated 14.05.2015 (DHC); Smt. Parvathamma M. v. Smt. Chandrakala CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 12 of 44 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:32:24 +0530 V., Crl. Appeal No. 508/2015, dated 14.06.2024 (Kar. HC); Shri. Roshan v. Ramesh Vithal Shet, Crl. Appeal No. 2660/2009, dated 26.06.2014 (Kar. HC); M/s. Pratap Technocrats Pvt. Ltd. v. M/s. Bharat Sanchar Nigam Limited, WP(C) No. 1712/2017, dated 30.05.2017 (DHC); and Shilpa Architects Planners & Designers v. DCIT, Chennai, ITA No. 1059 to 1065/2017, dated 06.06.2019 (ITAT, Chennai).
5. The arguments of Ld. Counsel for the appellants as well as that of Ld. Counsel for the respondent, heard and the record(s), including the Trial Court Record, written submission/written arguments, list of date of events and the case laws, filed by/relied upon by the parties have been thoroughly perused.
6. At the outset, this Court deems it prudent to enunciate the extent of jurisdiction of this Court in appeal/appellate jurisdiction. In this regard, this Court it is pertinent to outrightly make a reference to the decision of the Hon'ble Supreme Court in Padam Singh v. State of U.P., (2000) 1 SCC 621 , wherein the Hon'ble Court, while delving into the 'scope and ambit' of appellate court's jurisdiction inter alia noted as under;
"2. ... It is the duty of an appellate court to look into the evidence adduced in the case and arrive at an independent conclusion as to whether the said evidence can be relied upon or not and even if it can be relied upon, then whether the prosecution can be said to have been proved beyond reasonable doubt on the said evidence. The credibility of a witness has to be adjudged by the appellate court in drawing inference from proved and admitted facts. It must be remembered that the appellate court, like the trial court, has to be satisfied affirmatively that the prosecution case is substantially true and the guilt of the accused has been proved beyond all reasonable doubt as the presumption of innocence with which the accused starts, continues right through until he is held guilty by the final court of appeal and that CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 13 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:32:28 +0530 presumption is neither strengthened by an acquittal nor weakened by a conviction in the trial court..."
(Emphasis supplied)
7. Correspondingly, the Hon'ble Apex Court in Narendra Bhat v. State of Karnataka, (2009) 17 SCC 785, iterated in respect of the foregoing as under;
"3. This Court has in a series of judgments held that a court exercising appellate power must not only consider questions of law but also questions of fact and in doing so it must subject the evidence to a critical scrutiny. The judgment of the High Court must show that the Court really applied its mind to the facts of the case as particularly when the offence alleged is of a serious nature and may attract a heavy punishment."
(Emphasis supplied)
8. Quite evidently, from a conjoint reading of the aforenoted judicial dictates it is perspicuously deduced that the jurisdiction of this Court in an appeal extends to reappreciation of the entire material placed on record of the trial court and to arrive at an independent conclusion as to whether the said evidence can be relied upon or not. In fact, as aforenoted, court(s), while exercising appellate power is not only required to consider the question of law, rather, also question of facts to affirmatively reach a conclusion of guilt or innocence of an accused. In fact, it is trite law1 that non-re-appreciation of the evidence on record in an appeal may affect the case of either the prosecution or even the accused. Needless to reemphasize that the appellate court is to be further wary of fact that presumption of innocence of an accused, even extents until an accused is held guilty by the final court of appeal and that such a presumption is neither strengthened by an acquittal nor weakened by a conviction in the trial court.
9. Therefore, being cognizant of the aforesaid 1 State of Gujarat v. Bhalchandra Laxmishankar Dave, (2021) 2 SCC 735.
CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 14 of 44
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ABHISHEK by ABHISHEK
GOYAL
GOYAL Date: 2025.01.07
16:32:32 +0530
principles, however, before proceeding with the determination of the rival contentions of/on behalf of the parties, this Court deems it pertinent to reproduce the relevant provisions under law/NI Act, for the purpose of present adjudication, as under;
"118. Presumptions as to negotiable instruments- Until the contrary is proved, the following presumptions shall be made:
(a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date: that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance: that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer: that every transfer of negotiable instrument was made before its maturity;
(e) as to order of indorsement: that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamp: that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course: that the holder of a negotiable instrument is a holder in due course:
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
*** *** ***
138. Dishonour of cheque for insufficiency, etc., of funds in the account-Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 15 of 44 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:32:36 +0530 the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
(a) 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;
(b) the payee or the holder in due course of the cheque, as the case may be, 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; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
139. Presumption in favour of holder-It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability."
(Emphasis supplied)
10. At the outset, this Court observes that the objective behind the introduction of the provision(s) under Section 138 under the NI Act, by virtue of amendment/insertion in the year 1989 is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instrument. Notably, at the time of introduction of the said provision(s), the legislature was cognizant of the fact that the civil remedies were proving to be inadequate to curb the menace on the part of unscrupulous persons and a need was felt for introduction of a CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 16 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2025.01.07 16:32:41 +0530 penal provision to cease the propensity on the part of dishonest persons to exploit negotiable instruments for personal gains. Consequently, being wary of the imminent requirement for a penal provision to bring about faith in monetary transactions, Chapter XVII was introduced in the NI Act, comprising of the provisions from Sections 138 to 148. In particular, penal provisions under Section 138 NI Act were designed to1, "safeguard the faith of the creditor in the drawer of the cheque, which is essential to the economic life of a developing country like India. The provision has been introduced with a view to curb cases of issuing cheques indiscriminately by making stringent provisions and safeguarding interest of creditors". Notably, the Hon'ble Supreme Court in Goa Plast (P.) Ltd. v. Chico Ursula D'Souza, (2004) 2 SCC 235 , while inter alia analyzing the intent of introduction of Section 138 NI Act as well as scope and objective of the said provision(s) observed as under;
"26. The object and the ingredients under the provisions, in particular, Sections 138 and 139 of the Act cannot be ignored. Proper and smooth functioning of all business transactions, particularly, of cheques as instruments, primarily depends upon the integrity and honesty of the parties. In our country, in a large number of commercial transactions, it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. The sanctity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly, dishonour of a cheque by the bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious setback. Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment enacted the aforesaid provisions. The remedy available in a civil court is a long-drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee."1
Vinay Devanna Nayak v. Ryot Sewa Sahakari Bank Ltd., (2008) 2 SCC 305.
CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 17 of 44
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
GOYAL Date: 2025.01.07
16:32:45 +0530
(Emphasis supplied)
11. Relevantly, in order to attract culpability under the provisions of 138 NI Act, the prosecution is inter alia required to prove1 that; (a) the cheque was issued/drawn by a person on an account maintained by him for payment of any sum of money to another person from out of that account; (b) the cheque must have been issued against the discharge, either in whole or in part, of any debt or other liability, though, in the absence of proof to the contrary, it shall be presumed that it was issued for the same; and
(c) the cheque was returned by the bank unpaid either because the amount of money standing to the credit of that account is insufficient to honour the cheque; or because it exceeds the amount arranged to be paid from the account by an agreement with that bank. Reference in this regard is further made to the decision of Hon'ble Supreme Court in Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd., (2000) 2 SCC 745 , wherein the Hon'ble Court, while conscientiously analyzing the provisions under Section 138 NI Act inter alia explicated the ingredients of the said provision/offence, as under;
"10. On a reading of the provisions of Section 138 of the NI Act it is clear that the ingredients which are to be satisfied for making out a case under the provision are:
(i) 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 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 cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the account is insufficient to honour 1 N. Doraisamy v. Archana Enterprises, 1995 SCC OnLine Mad 25 CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 18 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:32:49 +0530 the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(v) 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."
(Emphasis supplied)
12. Here, it is further pertinent to observe that the statute/NI Act also provides for raising of a presumption/statutory presumption, casting/permitting a reverse burden on an accused and requiring the accused to prove the non-existence of the presumed fact. Quite evidently, Section 139 NI Act provides for/creates one such exception(s) to the general rule as to the burden of proof and shifts the onus on an accused to rebut the presumption envisaged under law, against him. Another such presumption under law being, under Section 118 NI Act. Reference in this regard, is made to the decision of the Hon'ble Supreme Court in Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148 , wherein the Hon'ble Court noted in regard the foregoing as under;
"33. The NI Act provides for two presumptions:
Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that "unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability". It will be seen that the "presumed fact" directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138...
34. Section 139 of the NI Act, which takes the form of a "shall presume" clause is illustrative of a presumption of law. Because Section 139 requires that CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 19 of 44 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:32:53 +0530 the Court "shall presume" the fact stated therein, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase "unless the contrary is proved"..."
(Emphasis supplied)
13. Strikingly, the Hon'ble Supreme Court in Rangappa v. Sri Mohan, (2010) 11 SCC 441, while painstakingly evaluating the intent and purpose behind the introduction of Section 139 under the Statute books/NI Act, observed as under;
"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. To that extent, the impugned observations in Krishna Janardhan Bhat [(2008) 4 SCC 54: (2008) 2 SCC (Cri) 166] may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.
27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof."
CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 20 of 44 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:32:58 +0530 (Emphasis supplied)
14. Markedly, it is observed from above that the presumption envisioned under Section 139 NI Act not only pertains to the fact that the cheque in question was drawn in discharge of debt or liability, rather, also includes a presumption that there exists a legally enforceable debt or liability at the time of such drawing. Congruently, Section 118(a) NI Act provides for a presumption in favour of the complainant1 inter alia to the effect that the negotiable instrument or the endorsement was made or endorsed for consideration. Indisputably2, the burden to rebut the presumption lies on an accused, by establishing probable defence. Needless to further observe here that, though, in order to rebut the statutory presumptions3, "an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial", however, the law is settled4 that a bare denial of the passing of the consideration or of existence of debt/liability by an accused, would not serve the purpose or come to the aid/rescue of an accused. In fact, law is well settled that under such circumstances, it is expected from an accused to bring 'something which is probable', on record for getting the burden of proof shifted to the complainant. Reference in this regard is made to the decision in Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513, wherein the Hon'ble Apex Court, explicated the law in regard the foregoing as under;
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent 1 Kundan Lal Rallaram v. Custodian, Evacuee Property, 1961 SCC OnLine SC 10.2
Rajaram v. Maruthachalam, 2023 SCC OnLine SC 48.3
Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106.4
Kishan Rao v. Shankargouda, (2018) 8 SCC 165.
CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 21 of 44
Digitally signed
ABHISHEK by ABHISHEK
GOYAL
GOYAL Date: 2025.01.07
16:33:03 +0530
man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him . However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act."
(Emphasis supplied)
15. Similarly, the Hon'ble Supreme Court in Basalingappa v. Mudibasappa, (2019) 5 SCC 418, summarized the principles governing the raising as well as rebuttal of statutory presumption, provided under the law/NI Act, in the following terms;
"25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 22 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:33:07 +0530 the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
(Emphasis supplied)
16. Ergo, being cognizant of the aforenoted principles, this Court would now proceed with the assessment of the rival contentions by/on behalf of the appellants and the respondent. Pertinently, Ld. Counsel for the appellants outrightly contended that the complaint in question was filed beyond the statutory prescribed period of limitation by the respondent and that the same was neither accompanied with any application for condonation of delay nor any reasons, forthcoming on behalf of the respondent to permit condonation of the said period. In particular, as aforenoted, as per the Ld. Counsel for the appellants since the respondent issued email dated 02.03.2017 to the appellant at its email's id. bearing [email protected], the period of limitation for filing the complaint ought to be reckoned from the said date. Consequently, as per the Ld. Counsel, the instant complaint, having been filed only on 11.05.2017 was grossly barred by limitation. However, in light of the submissions raised, this Court CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 23 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:33:11 +0530 deems it apposite to outrightly note that it is cognizant of the settled law1 that no format for notice/demand notice under Section 138 NI Act is prescribed under law and that it is sufficient that the demand, as specified under the said provision, is in writing and that of the amount of the dishonoured cheque. Correspondingly, it is an accepted proposition of law that a notice has to be read as a whole and in the demand notice, a demand for cheque amount is required to be made. As a corollary, if no such demand is made 2, then the demand notice would not pass the test of legal requirement of section 138 NI Act. Reference in this regard is made to the decision of the Hon'ble Supreme Court in Suman Sethi v. Ajay K. Churiwal & Ors., MANU/SC/0062/2000 , where the Hon'ble Court iterated the law in this regard, as under;
"8. It is well settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the "said amount" i.e. cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to "said amount" there is also a claim by way of interest cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving up break up of the claim the cheque amount, interest damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, notice might well fail to meet the legal requirement and may be regarded as bad."
(Emphasis supplied)
17. Simultaneously, this Court is also conscious of the recent dictates of the superior court(s)3, proclaiming that notice/demand notice sent through 'email or WhatsApp' mode, in case it fulfils the requirement of Section 13 of Information 1 Aryan Biological Corporation and Ors. v. Vishwakarma Metal Box & Ors., MANU/DE/4992/2022.
2K.R. Indira Versus Dr. G. Adinarayana, (2003) 8 Supreme Court Cases 300.
3Rajendra v. State of U.P. & Ors., MANU/UP/0261/2024.
CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 24 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:33:15 +0530
Technology Act, 2000 (hereinafter referred to as the 'IT Act'), would be a valid notice under Section 138 of the NI Act to the drawer of cheque, and same will be deemed to be served on the date of dispatch, itself. Nonetheless, this Court deems it further pertinent to note in respect of the foregoing that it is equally a settled law that where an offence under Section 138 NI Act is asserted to be committed by a company, then, notice under Section 138 NI Act/demand notice ought/is required to be sent to the company and that in the absence of serving any demand notice to the company, the essential and mandatory step of serving a demand notice to the drawer of the cheque fails. Pertinent in this regard to make reference to the decision in HG Retail Solutions Pvt. Ltd. v. Rajiv Kumar Saxena, MANU/DE/3092/2023, wherein the Hon'ble High Court of Delhi in an akin situation, noted as under;
"24. It is pivotal to highlight that as per section 141 NI Act, the principal accused is the company and vicarious liability will only extend to those responsible, once the principal accused i.e. the company is also proceeded against. Thus if an offence under section 138 NI Act has been committed by a company, then the company ought to be sent the demand notice, in order to comply with the statutory steps contained in section 138 NI Act. Section 138 NI Act mandates that demand notice be sent to the drawer of the cheque. In the present case the cheque was drawn by the director Karan Tomar for and on behalf of the company HG Retail. Thus the company ought to have been served the demand notice, as in the absence of serving any demand notice to the company, the essential and mandatory step of serving a demand notice to the drawer of the cheque fails.
25. In the present case, admittedly no demand notice was ever sent to the company i.e. the principal accused. There cannot be a prosecution without prosecuting the principal accused. The demand notice was only sent to the directors of the company. The company was made a party in the complaint u/s 138 NI Act, however the ingredient of section 138 NI Act which postulates that a demand notice be sent to the CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 25 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:33:19 +0530 drawer of the cheque, stands unfulfilled. The loan agreement was also between the petitioner company HG Retail and the respondent. The director was merely acting on behalf of the company. Thus if the default or non-payment is done at the behest of the company, the company ought to have been sent a demand notice. Even though the company was arrayed as an accused in the complaint under 138, however, without demand notice being served to the company the complaint itself fails and cannot be maintainable in terms of the provisions contained in section 138 NI Act. It is only when the company is prosecuted and proceeded against in compliance of section 138 NI Act, that vicarious liability in terms of section 141 NI Act will extend to its directors or others responsible for the commission of the offence.
26. It is imperative that all the elements of Section 138 of the NI Act be duly satisfied prior to taking cognizance of such a complaint. In the absence of demand notice being served upon the company, which serves as the drawer of the cheque, the complaint itself fails to meet the requirements stipulated by Section 138 of the NI Act, as one of the essential elements remains unsatisfied."
(Emphasis supplied)
18. Markedly, in light of the aforenoted judicial dictates when the facts of the instant case, in light of the aforesaid contentions of Ld. Counsel for the appellants and that of the Ld. Counsel for the respondent, are conscientiously evaluated, this Court deems it pertinent to outrightly note that the issue of limitation/complaint being barred by limitation has been raised by/on behalf of the appellants for the first time in the present appeal. Needless to mention that the appellants, neither raised the said submission before the Ld. Trial Court nor the order of cognizance of the Ld. Trial Court in the instant case, was ever challenged by/on behalf of the appellants on the ground of limitation. Further, even in the instant appeal, the issue of limitation was raised by the Ld. Counsel for the appellants only for the first time during the course of arguments and subsequently, under the written arguments filed by/on behalf of the appellants.
CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 26 of 44
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
GOYAL Date: 2025.01.07
16:33:24 +0530
Notwithstanding the foregoing when the material placed on the record is scrupulously analyzed, it is observed from a perusal of email dated 02.03.2017 that the same was issued at the email address bearing [email protected] and that there is no indication, even to the slightest, to suggest that the said email was, in fact, received/addressed to appellant no. 1, being the company in the instant case. Even otherwise, no evidence/material has been placed on record to demonstrate that the said email id. pertained to appellant no. 1 or that the service of notice on the said email id. would tantamount to service of notice to appellant no. 1 in the instant case. Needless to mention nothing in this regard is even forthcoming under the evidence of CW-1, either by cross- examination or by means of suggestions to the said witness. Accordingly, under such circumstances, this Court finds itself difficult to be convinced that the issuance of email dated 02.03.2017 by/on behalf of the respondent to at email id. bearing [email protected] would amount to compliance with the aforenoted dictate of the Hon'ble High Court in HG Retail Solutions Pvt. Ltd. v. Rajiv Kumar Saxena, MANU/DE/3092/2023 (Supra.), i.e., the same would amount to mandatory service of notice on the company/appellant no. 1 in terms of the said judicial dictate in the absence of any evidence in this regard forthcoming on record. On the contrary, legal notice dated 29.03.2017 (Ex. CW/53) was issued by the respondent to both the appellants, duly received at the appellants' end on 31.03.2017 (as per the tracking receipts dated Ex. CW1/58 to Ex. CW1/61). Needless to mention that the appellants did not deny the receipt of legal notice dated 29.03.2017 neither at the time of framing of notice under Section 251 Cr.P.C. on 12.09.2018 nor at the time of recording of the appellants' statement in terms of the CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 27 of 44 ABHISHEK ABHISHEK Digitally signed by GOYAL GOYAL Date: 2025.01.07 16:33:27 +0530 provision under Section 313/281 Cr.P.C. on 31.01.2020. Pertinent to note here that, though, it has been further contended by Ld. Counsel for the appellants in the instant appeal that under the notice framed under Section 251 Cr.P.C. on 12.09.2018 it has been wrongly recorded that the appellants received legal notice due to typographical error, however, the said contention does not find favour with this Court. The same is for the reason that not only the time of framing of notice on 12.09.2018 the appellants got recorded, "I did receive the legal notice...", rather, even after a gap of more than one year, on 31.01.2020, at the time of recording of statement under Section 313 Cr.P.C., similar admission was made by the appellants. Clearly, such consistent admission on the part of the appellants cannot, by any stretch of imagination, be termed to be a typographical error in recording that the legal demand notice dated 29.03.2017 (Ex. CW/53) was not received at the end of the appellants. Needless to mention that no application/ proceeding against the said 'so called' typographical error was ever filed/initiated by/on behalf of the appellants at any stage during the pendency of the proceedings before the Ld. Trial Court. On the contrary, as aforenoted, it is only in the present appeal such an assertion is raised by/on behalf of the appellants for the first time, contrary to the records of the Ld. Trial Court. Lastly, this Court is also not convinced with the submission of Ld. Counsel for the appellants that even presuming the notice/legal demand notice to be validly issued by the respondent on 29.03.2017, proceedings would still be time barred as the notice was received by the appellants on 31.03.2017, beyond 30 days of alleged dishonour of cheque on 01.03.2017. On the contrary, in this regard, reference is made to proviso (b) of Section 138 NI Act, which provides, "the payee or the holder in due course of the cheque, as the case may be, CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 28 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:33:34 +0530 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...". Significantly, from a perusal of the said provision, it is quite lucid that the law prescribes for issuance of notice in writing to the drawer of the cheque, within thirty days of the receipt of information by the banker regarding the dishonour of cheque and not of the period of receipt thereof by an accused, as otherwise contended by the Ld. Counsel for the appellants. Even otherwise, presuming for the sake of argument that the contention of Ld. Counsel for the appellants is tenable under law, in the instant case, notice/demand notice dated 29.03.2017 was, in fact, received by the appellants on the thirtieth day, i.e., on 31.03.2017, from the date of dishonour of cheque mentioned under the return memo dated 01.03.2017, as noted from the delivery receipts of the said notice.
19. In so far as the contention of Ld. Counsel for the appellants pertaining to the SPA Holder of the respondent not being personally aware of the facts of the present case, this Court is in concurrence with the finding of the Ld. Trial Court that except for mere blatant assertion to the said effect, nothing else/material is forthcoming in this regard from the end of the appellants. In fact, in this regard, this Court also observes that in his evidence by way of affidavit (Ex. C-1), the said SPA holder specifically mentioned that he was well acquainted with the facts of the present case and that nothing material has been brought on record, even in the cross examination of said SPA Holder/CW-1 to rebut the factum of his personal knowledge of the facts of the present case. In fact, during his cross-examination CW-1 inter alia specially asserted that he joined with the respondent/M/s. Bubna Advertising in the year CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 29 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:33:40 +0530 2009 and that the ledger account Ex. CW1/3 was prepared by the accounts department of the respondent under his/CW-1's supervision, bearing his signatures at point A. Apposite in this regard to reproduce the relevant extracts from the cross- examination of CW-1, dated 29.07.2019, as under;
"XXX by Sh. ***, Ld. Counsel for accused. I am Assistant Manager Client Services with M/s Bubna Advertising. I have not placed on record any document relating to my job or my designation. M/s Bubna Advertising was found in somewhere around 1985. I have not placed on record any document regarding the inabilities as mentioned in the document Ex.CW1/1 (SPA). I am working with abovesaid organization since 2009.
It is correct that I have filed this case on the basis of transaction with accused no. 1 company (M/s Britelite Media Pvt. Ltd.). It is correct that the cheque in question was issued by accused no. 1 company. Vol. The cheque in question was issued by Mr. Javed. It is correct that the cheque in question was issued by Mr. Javed on the behest of company as a Director. As far as, I remember the first transaction with the accused no. 1 company was started somewhere in 2014. It is correct that document Ex.CW1/3 is ledger account which is prepared by Account Department under my supervision and same bears my signature at Point A. I have signed the same in the capacity of SPA Holder. It is wrong to suggest that I have no authority to sign the Account ledger. It is wrong to suggest that an Assistant Manager Client Services cannot signed Account ledger..."
(Emphasis supplied)
20. Noticeably, it is observed from above that, though, CW-1 asserted in his cross-examination that he had not placed on record, any document relating to his job or designation regarding his employment with the respondent, however, the appellants did not summon and/or requisition the said documents from CW-1. Correspondingly, CW-1 in his cross-examination dated 13.09.2019 further denied the suggestion that he had no personal knowledge of the transaction pertaining to the appellant with the CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 30 of 44 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:33:44 +0530 respondent or the entire case. On the contrary, in his cross- examination on the said date, CW-1 specifically avowed that it has also dealt with Vishnu Pouch Packaging Pvt. Ltd. and Saloni Oils, other clients of the appellants. Germane to reproduce the relevant extracts from CW-1's cross-examination dated 13.09.2019, as under;
"XXX Sh. ***, Ld. Counsel for accused.
I have dealt with other company i.e. Vishnu Pouch Packaging Pvt. Ltd. It is wrong to suggest that I have not dealt with Vishnu Pouch Packaging Pvt Ltd. I have dealt with Saloni Oils, one of the client of accused company. I have dealt in radio domain for the Saloni Oils. It is wrong to suggest that I have not dealt with Saloni Oils. I do not remember the domain or any other client of the accused company with which I dealt.
It is wrong to suggest that I have no personal knowledge of the transactions of the accused company with the complainant. It is wrong to suggest that I have no personal knowledge regarding the entire case of the complainant. It is wrong to suggest that cheque in question was given as PDC as security against the future work/activity. It is wrong to suggest that cheque in question was not given in discharge of debt or liability. It is wrong to suggest that I have misused the cheque in question which was given as security. It is wrong to suggest that accused company has reconciled all the accounts with the complainant. It is wrong to suggest that I cannot depose since I have no personal knowledge It is wrong to suggest that I am deposing falsely."
(Emphasis supplied)
21. Apropos the present discourse, this Court deems it pertinent to deal with the contention of the Ld. Counsel for the appellants at this stage inter alia to the effect that the dishonoured cheques were not issued by him to the respondent against discharge of any debt or liability. In order to deal with the said contention, it is apposite to outrightly make a reference to the appellants' defence/plea of defence, raised/made at the time of framing of notice under Section 251 Cr.P.C. on 12.09.2018, as CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 31 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:33:49 +0530 under;
"...Q. Do you plead guilty or have any defence to make?
A. I do not plead guilty and claim trial. My plea of defence is as under:
I admit my signature on cheque in question. I did receive the legal notice. Cheque in question was issued as PDC and security in November, 2016. Same was issued for activity to be done by the complainant in December, 2016 but entire activities were not done. The payment regarding the activities done in that month by the complainant has already been cleared by us. Communications were done between the parties wherein we informed the complainant that certain activities were not done by them. We have sent debit notes to them. Complainant insisted that they have done all the activities but they did not furnish any prooi regarding the same. There is no liability towards the cheque in question Same has been misused.
Q. Do you want to lead DE?
A. Yes..."
(Emphasis supplied)
22. Correspondingly, in the statement of the accused persons, recorded in terms of the provisions under Section 313/281 Cr.P.C. on 31.01.2020, appellants asserted to the similar effect as under;
"...I am innocent. I admit my signature on cheque in question. I signed the cheque in question in the capacity of Director Britelite Media Pvt. Ltd. I did receive the legal notice. Cheque in question was issued as PDC and security in November, 2016. Same was issued for activity to be done by the complainant in December, 2016, but entire activities were not done. The payment regarding the activities done in that month by the complainant has already been cleared by us. Communications were done between the parties wherein we informed the complainant that certain activities were not done by them. We have sent debit notes to them. Complainant insisted that they have done all the activities but they did not furnish any proof regarding the same. There is no liability towards the cheque in question. Same has been misused. The document that complainant has submitted as proof of execution of activities (ledger account) are false and forged. I do not want to say anything else..."
CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 32 of 44 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:33:53 +0530 (Emphasis supplied)
23. Notably, from a conjoint reading of the aforesaid, it is observed that appellant no. 2 admitted his signatures on the dishonoured cheque as well as of execution and issuance thereof as the director of appellant no. 1. Undoubtedly, under such circumstances, presumption under Section 139 NI Act would arise in the instant case. However, in order to rebut the said presumption appellants merely contended that the cheque in question was issued as a post-date and security cheque in the month of November 2016 for the activities to be done by the complainant in December 2016, which were not performed by the complainant/respondent. It was simultaneously asserted by the appellants that despite exchange of correspondence regarding pendency of work, no activities were performed by the respondent and further that the appellants owed no dues towards the respondent. However, in this regard, this Court deems it apposite to note that as general proposition of law 1, repeated affirmed by superior courts, the question whether a post-dated cheque is for 'discharge of debt or liability' depends on the nature of the transaction. Consequently, where on the date of the cheque, liability or debt exists or the amount has become legally recoverable, the provisions under Section 138 NI Act would be attracted in an instant case, otherwise not. Reference in this regard is further made to the recent dictate of the Hon'ble Supreme Court in Sripati Singh (since deceased) through his Son Gaurav Singh v. State of Jharkhand & Ors., MANU/SC/1002/2021, wherein the Hon'ble Court, while revaluating the issue regarding the maintainability of the proceedings under Section 138 NI Act in the event of dishonour of security cheque(s), noted as under;
1Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458.
CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 33 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:34:00 +0530
"16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated Under Section 138 and the other provisions of N.I. Act would flow."
(Emphasis supplied)
24. Clearly, it is only when legal debt or liability exists against a drawer on the date of presentation of cheque, which eventually gets dishonoured, provisions under Section 138 NI Act would be attracted in a case. As a corollary, no liability can be attributed to a drawer where a security cheque is presented prior to the loan or installment maturing for repayment against which the cheque was issued or where the entire liability or debt is discharged prior to such presentation or in the cases of (altered) understanding in relation to such presentation. Consequently, for a drawer to avoid its liability under Section 138 of the NI Act on the basis of 'security deposit' defence, is required to demonstrate that on the date of the cheque, no legally recoverable debt or liability was under existence. In the instant case, as aforenoted, the appellants have averred that the cheque in question was issued for December 2016 liability, whereas no work was carried out by the respondent in this regard. However, except such blatant assertion, no evidence/material has been placed on record by/on behalf of the CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 34 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:34:05 +0530 appellants to assert any December 2016 activity on the part of the respondent. Nonetheless, Ld. Counsel for the appellants have also referred to the ledger and invoices placed on record by the respondent to aver that even under the said documents, no liability equivalent to the cheque amount is demonstrable by the respondent against the appellants. Significantly, in this regard, when the ledger of appellant no. 1 ( Ex. CW-1/3), filed by the respondent along with its complaint, for a period from 01.04.2015 till 31.03.2017, is evaluated, it is noted that the liability of appellant no. 1 as on 31.03.2017 has been demonstrated as Rs. 12,42,007.00/- (Rupees Twelve Lakhs Forty Two Thousand and Seven only). Further, as per the said complaint and evidence by way of affidavit (Ex. C-1), it has been specifically averred by/on behalf of the respondent that as on 31.03.2017, a sum of Rs. 12,42,007.00/- (Rupees Twelve Lakhs Forty Two Thousand and Seven only) was due and payable by the appellants to the respondent and that against part discharge of said liability, cheque in question/dishonoured cheque was issued to the respondent for a sum of Rs. 10,14,235.20/- (Rupees Ten Lakhs Fourteen Thousand Two Hundred and Thirty Five and Twenty paise only). Pertinent in this regard to reproduce the relevant extracts from CW-1's evidence by way of affidavit (Ex. C-1) as under;
"...3. That I say it is submitted the complainant has been regularly maintaining the accounts books and during the course of business a sum of Rs. 18,42,007/- (Rs. Eighteen Lacs Forty Two Thousand and Seven Only) had been outstanding against the accused as on 31/12/16 in the accounts books of the complainant duly maintained by the complainant during the course of business. It may be added that the accused made two payments to the complainant i.e Rs. 2,00,000/- (Rs. Two Lacs Only) received online through RTGS Transfer dated 02.02.17 and Rs. 4,00,000/- (Rs. Four Lacs) received online through RTGS Transfer dated 03.01.17 into the account of two CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 35 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:34:10 +0530 payments a sum of Rs. 12,42,007/- (Rs. Twelve Lac Forty Two Thousand and Seven Only) has outstanding against the accused as on 31/03/17. The true copy attested of ledger along with CD of the ledger and the said CD of Ledger has been run physically in the Laptop of the complainant before this Hon'ble court and the said Ledger Ex. CW1/3 (colly) and CD is Ex. CW1/4. (2CDs).
4. That I say it is submitted in discharge of his liability towards the complainant for the work done by the complainant as per order of the accused of media advertisement, the accused issued a cheque bearing no. 392285 amounting to Rs. 10,14,235.20 (Rs. Ten Lac Fourteen Thousand Two Hundred Thirty Five & Twenty Paisa Only) dated 31/12/2016 drawn at PNB Branch Kaushambi, Ghaziabad (U.P) - 201010 as part payment of the advertisements work done by the complainant as per orders of the accused and the accused assured the complainant that the said cheque would be honoured on its presentation. It may also be added that the complainant also gave special rebate/discount to the accused on their orders placed with the complaint and issued the credit note with regard to the same. Original Credit notes and Bills in original duly received by the accused. The Bills/Invoices are Ex. CW1/5 to CW1/36 & credit notes are Ex. CW1/37 to CW1/49..."
(Emphasis supplied)
25. Significantly, the respondent along with the aforesaid ledger also produced Invoices 19.10.2015 till 12.12.2016 (Ex. CW1/5 to Ex. CW1/36) as well as original credit notes ( Ex. CW1/37 to Ex. CW1/49). Prominently, from perusal of the records of the Ld. Trial Court, it is noted that invoices Ex. CW1/5 to Ex. CW1/19 were issued by the respondent in the name of BriteLite Media Corp., whereas the invoices Ex. CW1/20 to Ex. CW1/36 were issued by the respondent in the name of BriteLite Media Pvt. Ltd. Needless to mention, credit notes ( Ex. CW1/37 to Ex. CW1/49) were all issued in the name of BriteLite Media Corp. Appositely, in respect of the averment of the Ld. Counsel for the appellants that since appellant no. 1 was incorporated on 07.03.2016, no liability against earlier invoices could be fastened CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 36 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:34:14 +0530 to the appellants, Ld. Trial Court, under the impugned judgment noted as under;
"...29. The next contention of accused is that Britelite Media Pvt. Ltd. was incorporated on 07.03.2016. The certificate of incorporation Ex. CW1/D1 was put to CW1 and was objected to by Ld. Counsel for complainant on ground of authenticity of the document and on ground of being irrelevant. The objection of the Ld. Counsel for complainant stands disallowed as the same is a public document and the certificate filed is under digital signature. Ld. Counsel for complainant has argued that it was informed by accused vide email dated 14.11.2016 that billing is to be done in the name of Britelite Media Pvt. Ltd. It has been further argued that it is the duty of the party to inform the name in which billing is to be done. Perusal of invoices dated Ex. CW1/5 to Ex. CW1/19 (dated 19.10.2015 till 04.08.2016) reflect that they were drawn in the name of Britelite Media Corp. Many of these are signed by the accused himself. Invoices Ex. CW1/20 to Ex. CW1/36 (dated 05.11.2016 to 12.12.2016) were drawn in the name of Britelite Media Pvt. Ltd. and many of them are signed by accused. The signatures have not been denied by the accused on any of the invoices, thus, the invoices stand admitted. Since accused has signed invoices both of the year 2015 and of the year 2016 and both on behalf of Britelite Media Corp and Britelite Media Pvt. Ltd., the contention of Ld. Counsel for complainant is correct that the complainant company was drawing the bills in the name as informed by the accused and accused informed them by email dated 14.11.2016 that bill has to be drawn in the name of Britelite Media Pvt. Ltd from now on. Thus, it can safely be concluded that Britelite Media Corp is the same as Britelite Media Pvt. Ltd. with accused no. 2 being at the helm of affairs of both of them being the Director..."
(Emphasis supplied)
26. Relevantly, from a perusal of the above, though, this Court is in agreement with the observation of the Ld. Trial Court pertaining to the respondent's objection pertaining to the relevance and authenticity of document Ex. CW1/D1, being the certificate of incorporation of appellant no. 1, as being without merits for the reason of same being a public document and produced under CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 37 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.01.07 16:34:18 +0530 digital signatures before the Ld. Trial Court, however, the latter observations of the Ld. Trial Court in the aforesaid para does not find favour with this Court. In particular, this Court finds itself difficult to concede that simply because the invoices Ex. CW1/5 to Ex. CW1/19 (dated 19.10.2015 till 04.08.2016) and the invoices, Ex. CW1/20 to Ex. CW1/36 (dated 05.11.2016 to 12.12.2016) were all signed by appellant no. 2 and in view of the email dated 14.11.2016 issued to the respondent on behalf of the appellant, BriteLite Media Corp. and BriteLite Media Private Limited/appellant no. 1 can be deemed to be one and the same entities under law. In this regard, it is outrightly asserted that from a scrupulous analysis of the said invoices, in particular, invoice dated 29.02.2016 (Ex. CW1/18), issued by the respondent to BriteLite Media Corp., it is noted that the PAN No. of the said entity is specified therein as; 'ADSPA5246R'. In contrast, PAN No. under the invoices Ex. CW1/20 to Ex. CW1/36 (dated 05.11.2016 to 12.12.2016), issued to BriteLite Media Pvt. Ltd., is specified as; 'AAGCB6496E', which clearly controverts any such presumption. However, even presuming for the sake of argument that appellant no. 2 was working as helm of two entities and had signed all the said invoices in question, in the considered opinion of this Court, it would not be safe to presume that both the entities are one and the same as nowhere under the email dated 14.11.2016 is there any indication of takeover/subsumption of liability of BriteLite Media Corp. by BriteLite Media Pvt. Ltd. In fact, the said email/email dated 14.11.2016 merely records as under;
"Mon, Nov 14, 2016 at 12:45 PM Kunwar Javed Akhter <[email protected]> To: Bubna Advertising <[email protected]> Cc: Rakesh Gupta <[email protected]>, sushil bubna CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 38 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:34:23 +0530 <[email protected]>, [email protected], Devender Jain <[email protected]>, vishwanath <[email protected]> Deepesh Ji, The billing should be done in the name of below: Britelite Media Pvt. Ltd.
30/15, Cassia Road, Shipra Suncity, Indirapuram, Ghaziabad 201014 Copy of PAN attached, Thanks & warm regards, ..."
(Emphasis supplied)
27. Quite evidently, it is seen from above that the email dated 14.11.2016 merely records the particulars in whose name billing is sought to be done by the respondent and does not record of subsumption/takeover of liability of Britelite Media Corp. by BriteLite Media Pvt. Ltd./appellant no. 1. In fact, this Court finds credence in the submission of Ld. Counsel for the appellants that in the absence of entire trailing correspondence to the said effect being brought on record, no such presumption could even otherwise be drawn. Needless to mention nowhere under its complaint or at any stage during the trial, respondent averred or proved that the liability of BriteLite Media Corp. was incorporated into the liability of BriteLite Media Pvt. Ltd., entitling the respondent to prepare a consolidated ledger account for the said two entities. Accordingly, in the considered opinion of this Court, there is nothing on record of the Ld. Trial Court to permit raising of any such presumption that BriteLite Media Corp. and BriteLite Media Pvt. Ltd. are one and same entities.
28. Markedly, during the course of present appeal, it has been asserted by the appellants that BriteLite Media Corp. is, in fact, a sole proprietorship concern of appellant no. 2 and that the liability of appellant no. 2 cannot merge with the liability of CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 39 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2025.01.07 16:34:28 +0530 company simply for the commonality of appellant no. 2 in the said two entities. Undoubtedly, this Court is mindful of the settled law1 that in case of proprietorship concern, it is only the proprietor who can be held liable under Section 138 NI Act, on account of the fact that proprietorship concern has no separate legal identity and further that a sole proprietorship firm does not fall within the scope and ambit of Section 141 NI Act. Correspondingly, on the aspect of law, though, this Court is in agreement with the submission of the Ld. Counsel for the appellants that there is no presumption of merger of liability of proprietorship concern with that of company solely for the reason of proprietor being also a director in the latter entity/company, however, in the instant case, the factum of BriteLite Media Corp. being a sole proprietorship concern does not appear to have been brought to the notice of the Ld. Trial Court from either the material placed on record by the appellants or even under the cross examination of CW-1. Nevertheless, as aforenoted it is not the case of even the respondent that the liability of BriteLite Media Corp. was takeover by BriteLite Media Pvt. Ltd. even under the complaint of the respondent or otherwise. Further, as aforementioned, email dated 14.11.2016 also does not record of any such takeover, rather, simply records that the billing by respondent ought to be done in the name of appellant no. 1. As aforenoted, from perusal of the invoices placed on record by the respondent, it is noted that the invoices Ex. CW1/5 to Ex. CW1/19 (dated 19.10.2015 till 04.08.2016) were issued in the name of BriteLite Media Corp., whilst, invoices, Ex. CW1/20 to Ex. CW1/36 (dated 05.11.2016 to 12.12.2016) were issued by the respondent in the name of appellant no. 1/BriteLite Media Pvt.
1Raghu Lakshminarayanan v. M/s. Fine Tubes, (2007) 5 SCC 103; and M.M. Lal v. State NCT of Delhi, MANU/DE/4881/2012: 2012 (4) JCC 284.
CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 40 of 44
Digitally signed
ABHISHEK by ABHISHEK
GOYAL
GOYAL Date: 2025.01.07
16:34:32 +0530
Ltd. Undoubtedly, all the invoices were signed by appellant no. 2. However, even under such circumstances, it cannot be presumed that BriteLite Media Corp. and BriteLite Media Pvt. Ltd. are one and the same entities and that their liability is common, even presuming that appellant no. 2 was at the helm of affairs of both the said entities as directors, considering that the law provides for vicarious liability of, "every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company" along with the company, in cheque dishonour cases in terms of the provisions under Section 141 NI Act and not vice versa. Clearly, a commonality of director in two entities, in the considered opinion of this Court, can neither be sufficient to hold the said to entities to be same/similar nor enough to consolidate the liabilities of two such entities, presuming in the instant case that BriteLite Media Corp. and BriteLite Media Pvt. Ltd., were, in fact, companies. On the contrary, under the cross examination of CW-1 on 29.07.2019, the appellants clearly demonstrated that appellant no. 1 was incorporated on 07.03.2016, whereupon the question of any liability qua the respondent prior to said point in time could not have arisen. Correspondingly, CW-1 admitted under the said cross examination that appellant no. 2 had been named a party in the instant complaint as a director of appellant no. 1 only. Relevant extract from CW-1's said cross examination is reproduced as under;
"...At this stage, a document is Ex. CW1/D1 relating to the accused of certificate of corporation is shown to the witness and asked him confirm the date of incorporation and witness replied that the date of incorporation is 07th March, 2016 (Objected to by Ld. Counsel for complainant on the authenticity of the document and question is irrelevant). It is wrong to suggest that the ledger which is Ex. CW1/3 is false CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 41 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2025.01.07 16:34:37 +0530 and frivolous since it bears transaction of accused no. 1 company relating to year 2015 whereas accused no. 1 company itself was incorporated in the year 2016. It is correct that accused no. 2 Mr. Javed has been made party in the present case in the capacity of Director of accused no. 1 company..."
(Emphasis supplied)
29. Ergo, in light of the foregoing, when the material placed on record is scrupulously evaluated, this Court, unambiguously reaches a conclusion that the respondent has failed to demonstrate liability to a tune of the cheque amount in question against the appellants, in particular, against appellant no. 1 on the date of presentation of the cheque in question. Needless to reiterate that the consolidated ledger of appellant no. 1 (Ex. CW1/3) as well as the invoices from 19.10.2015 till 12.12.2016 (Ex. CW1/5 to Ex. CW1/36), produced by the respondent along with the complaint incorporate and merge liabilities of two separate entities, i.e., BriteLite Media Corp. as well as BriteLite Media Pvt. Ltd. into single entity, i.e., appellant no. 1. However, as aforenoted, neither under the complaint or under the correspondence dated 14.11.2016 anything is forthcoming to demonstrate any such consolidation, merger, takeover or subsumption of liability of BriteLite Media Corp. into BriteLite Media Pvt. Ltd. Further, undoubtedly, under the said ledger, as on 31.03.2017 liability to a tune of Rs. 12,42,007.00/- (Rupees Twelve Lakhs Forty Two Thousand and Seven only) has been demonstrated by respondent against the appellants. However, as aforenoted, in the absence of proof of consolidation, merger, takeover or subsumption of liability of BriteLite Media Corp. into BriteLite Media Pvt. Ltd., this Court finds itself difficult to be convinced that the entire liability of cheque amount falls on appellant no. 1, extending the liability even to appellant no. 2 by virtue of provision under Section 141 NI Act. CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 42 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.01.07 16:34:42 +0530 Needless to reiterate that the appellants have duly proved on record that appellant No. 1 was incorporated on 07.03.2016 and that liability under the ledger produced by the respondent before the Ld. Trial Court extends to a period prior in time to such incorporation. Consequently, in the considered opinion of this Court, the appellants, in the instant case, have been able to successfully rebut the presumption under Section 139 NI Act by preponderance of probabilities, reverting the burden back on the respondent in the instant case. Further, as aforenoted, the respondent has been unable to prove from the documents as well as material placed on record, liability to a tune of the cheque amount in question against appellant no. 1 on the date of presentation of cheque. Needless to reiterate that appellant no. 2 was made a party in the complaint in question as a capacity of director of appellant no. 1 and not in his individual capacity and no material is placed on record to demonstrate merger, takeover or subsumption of liability of BriteLite Media Corp. into BriteLite Media Pvt. Ltd. or that the said two entities being one and the same.
30. Conclusively, in light of the facts and circumstances noted hereinabove, the respondent has not, in the opinion of this Court, been able to unwaveringly and 'beyond reasonable doubt' to bring home the charge of offence under Section 138 NI Act against the appellants herein. On the contrary, as aforenoted, the appellants, in the instant case, have been able to successfully rebut the presumption under Section 139 NI Act by preponderance of probabilities, reverting the burden back on the respondent in the instant case, which the respondent failed to discharge by demonstrating liability to a tune of the cheque amount in question against appellant no. 1 on the date of presentation of cheque. Apposite at this stage to note that, though, this Court holds highest CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 43 of 44 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2025.01.07 16:34:47 +0530 regard for the decisions relied upon by Ld. Counsel for the respondent, however, the same would not, in the considered opinion of this Court come to the aid/rescue of the respondent in the manner as prayed for the facts and circumstances of the said cases/dictates are clearly, distinguishable.
31. Conclusively, in view of the above discussion, the present appeal deserves to be allowed and is hereby allowed. As such, in light of the foregoing, this Court reiterates that from the facts and circumstances placed on record, the appellants cannot be determined to be guilty 'beyond reasonable doubt' of offence under Section 138 NI Act. Consequently, the judgment dated judgment dated 07.08.2023 and order on senetence dated 14.09.2023, passed by Ld. MM (NI Act)-02, Central, Tis Hazari Courts, Delhi in case bearing; " Sushil Kumar Bubna v. M/s. Britelite Media Pvt. Ltd., CC. No. 6632/2017", convicting and sentencing the appellants for the offence punishable under Section 138 NI Act, are hereby set aside.
32. Trial Court Record be sent back along with a copy of this order/judgment.
33. Appeal file be consigned to record room after due compliance.
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.01.07
16:34:53
+0530
Announced in the open Court (Abhishek Goyal)
on 07.01.2025. ASJ-03, Central District, Tis Hazari Courts, Delhi CA No. 246/2023 M/s. Britelite Media P. Ltd. & Anr. v. Sushil Kumar Bubna Page No. 44 of 44