Delhi District Court
Sharad Kedia vs M/S Avanti Learning Centre Pvt Ltd. And ... on 6 February, 2025
DLSE010017512024
IN THE COURT OF SH. LOVLEEN ADDL. SESSIONS JUDGE-03
SAKET COURTS, NEW DELHI
CR Rev No. 69/2024
SHARAD KEDIA
S/o Late Jaganth
R/o B702, Hamilton Heights
Aspire Towers, Tipat Palla Road,
Sector-37, Faridabad, Haryana.
........Revisionist
versus
1. M/S. AVANTI LEARNING CENTRES PRIVATE LIMITED
Having its Registered Office
at 16, Paschmi Marg,
Vasant Vihar,
New Delhi-110057.
2. AKSHAY SAXENA
Director
CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 1/17
M/S. AVANTI Learning Centres Private Limited
Having its Registered Office
At 16, Paschmi Marg,
Vasant Vihar,
New Delhi-110057.
............Respondents
Date of institution : 23.02.2024
Date of Reserving judgment : 06.02.2025
Date of Pronouncement : 06.02.2025
JUDGMENT
1. This is a revision petition filed u/s 397 Cr.P.C against the order dated 30.01.2024 passed by the court of Ld. Metropolitan Magistrate-03, (NI Act), South-East District in CC No. 4501/2020 titled as "Sharad Kedia Vs. M/s. Avanti Learning Pvt. Ltd. and Ors." whereby an application moved by the revisionist herein for grant of interim compensation u/s 143 A NI Act was dismissed. The said complaint was filed by the revisionist against the respondents in respect of his grievance as to the dishonour of a cheque issued by the respondents herein in favour of the revisionist. For the sake of convenience the revisionist herein shall be referred to as 'the complainant' and the respondents herein shall be referred to as 'the accused persons'.
Grounds of Revision
2. The grounds for revision cited by the complainant are as under:-
A. Because Ld. Magistrate has wrongly dismissed the CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 2/17 application under Section 143A N.I. filed by the Petitioner/Complainant.
B. Because Ld. Magistrate has adopted a wrong approach as at present stage defence of the accused cannot be looked into especially when post framing of notice evidence is yet commence. It is submitted that impugned order holds that accused has "substantial defence"
amounts to pre-judging the case which is not permissible under the criminal law.
C. Because the finding of Ld. Magistrate is clearly erroneous as agreement was dated 01/04/2019 and after writing one email on 14/5/2019 there is no document or correspondence by the Respondent on the subject matter of the email. Hence the email which was written within 1½ month of agreement cannot be basis to decide the action post the said period i.e. 16/5/2019 to 01/05/2020 which was the date of the cheque.
D. Because the finding of the Ld. Magistrate is clearly erroneous as it failed to appreciate that post 14/5/2019 next email written by the Respondent was 10/05/2020 vide which it had stopped the payment of cheque and during the period between 15/5/2019 till 30/04/2020 there is complete lull on the part of the Respondent. It is submitted that this in itself proves the falsity of the stand of Respondent an it cannot be said that Respondent has a substantial defense and it has raised the triable issue. E. Because the finding of Ld. Magistrate is clearly CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 3/17 erroneous as much it has failed to appreciate that stand of the Respondent in reply to legal notice is generic, non- specific and vague.
F. Because the finding of the Ld. Magistrate is clearly erroneous in as much as Ld. Trial Court has even not evaluated the merit of the alleged defense and has taken on the face of it.
G. Because the finding of the Ld. Magistrate is clearly erroneous in as much as Ld. Trial Court consideration payable under the Agreement as per clause 5 was with respect to Sale and Purchase of Business Goodwill and Licensing of the Intellectual property.
H. Because the finding of the Ld. Magistrate is clearly erroneous in as much.
I. Because the finding of the Ld. Magistrate is clearly erroneous in as much as it failed to appreciate plea of Respondent is with respect to breach of Clause 6 (d) which is merely a bald assertion. Surprisingly a Respondent has not placed any document on record especially when the tenure of the agreement is only 1 year, and the same is grossly vague.
J. Because the finding of the Ld. Magistrate is clearly erroneous in as much as it has it premised the rationale of the impugned order as if it was deciding leave to defend application filed by the Respondent. It is in the process, Ld. Magistrate has not ven prima facie evaluated the alleged defense and it has failed to appreciate alleged CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 4/17 defense of the Respondent is false, frivolous and moonshine and would not have even passed the muster of "triable issue" as required under Order 37 and certainly not for unconditional leave to defend. As a corollary it follows that if the Ld. Trial Court would have come to conclusion that defense is moonshine and baseless then it should have straight away allowed the complaint. K Because the Ld. Magistrate failed to appreciate that the alleged defence which has been allegedly raised by the Respondent are frivouls, and moonshine for the following reasons:
(a) Petitioner is in breach of Clause 6 (a) of the Agreement:
(i) Perusal of this plea which has been allegedly raised in letter dated 10/5/2020 is grossly vague and lack material particulars.
(ii) Perusal of the clause 6 (a) shows that it pertains to "interference with the business and operation of the coaching center Business" The "coaching center Business" has been defined in clause 1 (a) as the business of coaching classes as in currently being carried out at the Premises and even "premises" has been defined in clause 1 (d) as E-92, Ground Floor, Har Gyan Singh Arya Marg, South Extension-1New Delhi-110049 and H-14 Kotla Mubarakpur, South Extension-1 New Delhi-110013.
(iii) It is submitted that as per agreement there is no bar CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 5/17 for running of coaching center by Petitioner but the said coaching center has to be outside the territory defined in the agreement. The "Territory" has been defined in the agreement in Clause 1(e). Thus how there is violation of Clause 6 (a) is there is not clear.
(iv) It does not even gives the details as to how many number of the student had moved to new center and when and what is the loss suffered by the Respondent.
(b) Petitioner is in breach of Clause 7 (a)(i) & (ii)
(i) Again this plea is merely a bald assertion as all that Respondent has stated is its letter dated 10/5/2020 that "It has come to our knowledge that you have made several attempts from time to time to poach several employees of Avanti" and "It has come to our knowledge that several students enrolled into Avanti were offered classes by you at your new centre."
L. Because the finding of the Ld. Magistrate is clearly erroneous in as much as it failed to appreciate that Petitioner in its notice dated 01/06/2020 upon dishonour of cheque No. 521390 has categorically stated with reference to letter dated 10/5/2020 that the said letter is an afterthought, grossly vague and has been sent under legal advice. The said legal notice has been duly replied to by the Respondent 09/06/2020 wherein Respondent has again reiterated the same stand and failed to give any material particulars, which shows that the plea of the Respondent is false.
CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 6/17 M. Because the finding of the Ld. Magistrate is clearly erroneous in as much as it failed to appreciate that under Clause 5 (b) Respondent had the business license of IPR till May 1 2020 and as per Clause 6 (c) of the Agreement Respondent has the right to use the term "Nivedita Classes till May 1, 2020 hence with ill intent stop payment was done at the fag end by the Respondent and had there being any genuine ground Respondent would have certainly escalated the same during the tenure of the Agreement.
N. Because the finding of the Ld. Magistrate para 9 is absolutely wrong as it amounts to mini trial at the stage of deciding an application under Section 143A. O. Because Ld. Magistrate failed to appreciate that even if the power under Section 143A is taken as discretionary still defense of the Respondent/accused cannot be considered at the present stage.
P. Because the Ld. Magistrate Failed to appreciate that presumption under Section 139 NI Act is in favour of the same can only be rebutted post evidence which has yet not commenced.
Q. Because the Ld. Magistrate failed to appreciate that summons were issued upon satisfaction of the preconditions of Section 138. It is submitted that it has been held in the case of "Guljama Shah Jahir Shah VS Shri Sadguru Kaka Stone Crusher" by the Hon'ble Bombay High Court in judgment dated 21.09.2023 CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 7/17 passed in Crl. Writ Petition NO. 83/2023.
R. Because the Ld. Magistrate failed to appreciate the judgment in the case of "Suryodhan Tyagi and Ors. Vs. Tirender Sharma" reported as MANU/DE/0138/2022. S. Because the impugned judgment is contrary to law and facts of the case.
3. It is prayed in the petition by the complainant that the impugned order dated 30.01.2024 may be set aside and interim compensation may be awarded. No oral arguments have been advanced.
Submissions of Accused Persons
4. It is submitted on behalf of the accused persons that the Ld. Magistrate has correctly passed the impugned order as a triable issue is indeed available in the matter. Moreover, the accused persons have not indulged in any dilatory tactics, which disentitles the complainant from seeking any interim compensation. Reliance is placed upon the observations made in JSB Cargo and Freight Forwarder Ltd. & Ors. Versus State and Anr. 2021 SCC Online Del 5425; V. Krishnamurthy Versus Diary Classic ICE Creams Pvt. Ltd. 2022 SCC OnLine Kar 1047; Ashwin Ashokrao Karokar Versus Laxmikant Govind Joshi, 2022 SCC OnLine Bom 8577; L.G.R. Enterprises Versus P. Anbazhagan, 2019 SCC OnLine Mad 38991; Rakesh Ranjan Srivastava Versus State of Jharkhand, 2024 SCC OnLine SC 309.
CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 8/17 DISCUSSION Law Governing The Issue
5. Before proceeding to adjudicate the matter, it would be appropriate to reproduce the provision made U/s 143A of Negotiable Instruments Act for a better understanding of the issue. The relevant provision is reproduced herein below:
"Section 143-A: Power to direct interim compensation.--(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant--
(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and
(b) in any other case, upon framing of charge. (2) The interim compensation under sub-section (1) shall not exceed twenty per cent. of the amount of the cheque.
(3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.
(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.
(5) The interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973 (2 of 1974).
(6) The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973 (2 of 1974), shall be reduced by the amount paid or recovered as interim compensation under this section."
CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 9/17
6. In JSB CARGO and Freight forwarder (P) Ltd vs State 2021 SCC Online Del 5425 at para no. 62, it has been categorically held by the Hon'ble Delhi High Court that the said provision under Section 143A of Negotiable Instruments Act is directory and not mandatory. In Ashwin Ashokrao Karokar Vs. Laxmikant Govind Joshi Crl. (Writ Petition No. 48/2022) date of decision 07.07.2022, the same issue was dealt with by Hon'ble High Court of Bombay and it was held that the provision u/s. 143A of Negotiable Instruments Act is directory and not mandatory. Recently, the Hon'ble Supreme Court of India, speaking through Rakesh Ranjan Shrivastava Vs. State of Jharkhand and Anr. 2024 SCC Online SC 309, has also ruled that the exercise of power u/s 143A(1) of Negotiable Instruments Act is discretionary and that the provision is directory and not mandatory in nature.
7. Here it would be appropriate to reproduce the principles laid down w.r.t. exercise of jurisdiction u/s 143A Negotiable Instruments Act regard in L.G.R. Enterprises & Ors. Vs. P. Anbazhagan 2019 SSC online Madras 38991. The relevant extract is as under:
"8. Therefore, whenever the trial Court exercises its jurisdiction under Section143A(1) of the Act, it shall record reasons as to why it directs the accused person (drawer of the cheque) to pay the interim compensation to the complainant. The reasons may be varied. For instance,
- the accused person would have absconded for a longtime and thereby would have protracted the proceedings or
- the accused person would have intentionally evaded service for a long time and only after repeated attempts, appears before the Court, or
- the enforceable debt or liability in a case, is borne out by overwhelming materials which the accused person could not on the face of it deny or
- where the accused person accepts the debt or liability partly or
- where the accused person does not cross examine the witnesses CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 10/17 and keeps on dragging with the proceedings by filing one petition after another or
- the accused person absonds and by virtue of a non-bailable warrant he is secured and brought before the Court after a long time or
- he files a recall non-bailable warrant petition after a long time and the Court while considering his petition for recalling the non- bailable warrant can invoke Section 143A(1) of the Act. This list is not exhaustive and it is more illustrative as to the various circumstances under which the trial Court will be justified in exercising its jurisdiction under Section 143A(1) of the Act, by directing the accused person to pay the interim compensation of 20% to the complainant."
8. We may also note observations made by Hon'ble Bombay High Court in Ashwin Ashokrao (Supra) which are to the effect that grant of interim compensation, would be at the discretion of the Court, based upon consideration of various factors, such as (a) Whether the requirement of Section 138 of Negotiable Instruments Act were fulfilled, (b) Whether the pleadings disclosed the drawing of presumption (c) Whether proceedings were within limitation and (d) Whether prima facie a legal debt or liability was disclosed from the complaint or the notice of demand preceding it, and factors as such.
9. In Rakesh Ranjan Shrivastava (Supra), the Hon'ble Supreme Court of India has also laid down the broad parameters for exercising jurisdiction u/s 143A of Negotiable Instruments Act. The same are as under:-
i. The Court will have to prima facie evaluate the merits of the case made out by the complainant and the merits of the defence pleaded by the accused in the reply to the application. The financial distress of the accused can also be CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 11/17 a consideration.
ii. A direction to pay interim compensation can be issued, only if the complainant makes out a prima facie case.
iii. If the defence of the accused is found to be prima facie plausible, the Court may exercise discretion in refusing to grant interim compensation.
iv. If the Court concludes that a case is made out to grant interim compensation, it will also have to apply its mind to the quantum of interim compensation to be granted. While doing so, the Court will have to consider several factors such as the nature of the transaction, the relationship, if any, between the accused and the complainant, etc. v. There could be several other relevant factors in the peculiar facts of a given case, which cannot be exhaustively stated. The parameters stated above are not exhaustive.
FACTS OF THE CASE
10. The facts of the case have been correctly noted by the Ld. Magistrate in the impugned order at para 2. The same is reproduced below for ready reference:-
"2. It is submitted by the Ld. counsel for the complainant that complainant is in the education field operating coaching centres and enjoying the goodwill in the market for several years under the name of Nivedita classes and complainant is the sole proprietor of Nivedita Classes as well as one of the Directors of CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 12/17 M/s Shloka Education Services Pvt Ltd, which prepared the study materials of Nivedita Classes, whereas accused no. 1 is a company which is also in the coaching business and accused no. 2 Sharad Kedia, is the Director of M/s Avanti Learning Centre Pvt Ltd. That complainant company entered into a service agreement on 01.03.2019 with the accused company for taking over the operations of coaching centre being run under name of Nivedita Classes. That earlier parties entered into a service agreement on 28.07.2018 which was superseded by the agreement on 01.03.2019 whereby the business goodwill and all rights and interests in the coaching centre business and license of business IPR to Avanti till 01.05.2020 was sold for a aggregate consideration of Rs. 66 Lacs plus any applicable taxes. That consideration was to be paid in the following manner i.e. Rs. 10 Lacs on 01.04.2019, Rs. 20 Lacs on 01.05.2019, Rs. 30 Lacs on 01.05.2020 and Rs. 6 Lacs on 01.05.2021 plus any applicable tax respectively. That the complainant / Shlok and Nivedita were permitted to run coaching classes not covering science and mathematics for CBSE and preparation for IIT JEE and NEET Examinations during this period and also sell online coaching classes for any subject or course during this period outside the Territory as defined in the agreement i.e. the geographical area comprised within a radius of 5 KM of premises i.e. E-92, GF Hargyan Singh Arya Marg, South Ex-1, New Delhi-110049 and H-14, Kotla Mubarakpur, South Ex-1, New Delhi-110013 where Nivedita Classes were running its coaching and the radius was CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 13/17 to be measured along a direct line without regard to road and transport. That accused company in terms of the agreement dated 01.03.2019 issued PDCs bearing no. "521388" for an amount of Rs. 10 Lacs for 01.04.2019 and bearing No. "521389" for an amount of Rs. 21,60,000/- for 01.05.2019 and bearing no. "521390" for an amount of Rs. 32,40,000/- for 01.05.2020 and bearing no. "521391" for an amount of Rs. 6 Lacs for 01.05.2021. That although, cheques no. "521388" and "521389" were duly cleared upon presentation, however, cheque no. "521390" for an amount of Rs. 32,40,000/-was dishonoured upon presentation with the reasons / remarks "Payment stopped by drawer". Complainant was shocked to receive an e-mail on 10.05.2020 from the accused persons on the alleged ground of breach of terms of the agreement dated 01.03.2019 due to which payment had been stopped qua the cheque in question by the accused persons. That the e-mail letter dated 10.05.2020 showed that the intent of the accused persons had gone bad. That the e-mail letter was written as an after thought after the stop payment of the cheque in question as the grounds in the letter are vague and without any particulares or details. That complainant sent legal notice cum reply on 01.06.2020 calling for the clearance for the cheque in question no. 521390. That on 09.06.2020 accused No. 2 replied to the legal notice dated 01.06.2020 reiterating the grounds taken in the earlier letter dated 10.05.2020. That complainant had performed its obligations with sheer diligence. Thereafter, 15 days time since receipt of legal notice also elapsed and accused CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 14/17 persons failed to make the payment to the complainant and committed an offence under Section 138 of NI Act.........................."
11. During the course of the proceedings in the said complaint, the above mentioned application u/s 143 A NI Act was moved by the complainant and vide the impugned order dated 30.01.2024 the Ld. Magistrate was pleased to dismiss the same. The reasoning given by the Ld. Trial Court while passing the impugned order is reproduced below for ready reference:
"................................................................................................... .....................................................................................................
7. Thus, the purpose of introducing Section 143A was to counter dilatory tactics, provide relief to the complainant and to deter cheque bouncing cases. In the case at hand, the accused persons have pleaded not guilty, claimed trial and have admitted signing the cheque in question.
8. The defence taken by the accused persons pertains to non compliance of the settlement agreement dated 07.03.2019 by the complainant. It appears that the plea taken for stopping the payment of the cheque in question is that due to non compliance with clause 6 (a), 6(d), 7(a)(i) and 7(a)(ii) by the complainant that payment qua the cheque was stopped. Accused persons are relying on the e-mail dated 10.05.2020 wherein the abovesaid clauses have been mentioned and also the cheque in question has been mentioned therein and even clause 5(d) of the settlement agreement has been invoked for stopping the payment of the cheque in question. Accused CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 15/17 persons are also relying upon an e-mail dated 14.05.2019, wherein accused persons have requested the complainant to send the past as well as future leads from the form on the NC website (Nivedita Classes) since, it is specific term of clause 6(d), however, nothing was done in this regard by the complainant. Accused persons are also relying upon screenshots of the Google maps pertaining to Nivedita Classes to assert that complainant is poaching students causing significant loss to the accused persons.
9. Perusal of the record reflects that the accused persons have a substantial defence in the present case to stop the payment of the cheque in question in case there is a non compliance of the settlement agreement. The abovesaid is a triable issue and has to be proved by way of evidence of the parties. Hence, this Court is not inclined to award interim compensation at this stage. Accordingly, application under Section 143-A NI Act stands dismissed and disposed off.
..................................................................................................... ...................................................................................................."
Decision
12. A bare perusal of the impugned order reflects that the Ld. Magistrate has considered all the pleadings and the records available before him. Ld. Magistrate has also considered the plea of defence raised by the accused persons, especially as to the non compliance of certain terms of the agreement previously arrived at between the parties. Admittedly, the parties have agreed, in the said agreement previously arrived at between them, that CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 16/17 the payments of the consideration amount shall be subject to the continuous performance of promises / obligation and covenants set out therein [clause 5(d)]. No doubt, the pleas raised by the accused persons are still to be established on record, still the same seem sufficient at this stage to hold that a triable issue is indeed made out in the present case. That apart, the TCR does not reflect that the accused persons have attempted to delay the disposal of the matter on merits. In the entire facts and circumstances, this Court does not find any reasonable cause to depart from the opinion rendered by the Ld. Magistrate in the impugned order dated 30.01.2024. The order passed by Ld. Magistrate does not seem to be arbitrary, perverse or irrational nor does it reflect any jurisdictional error which occasioned any injustice in the matter. The present petition is devoid of any merits and is hereby dismissed.
13. TCR be sent back along with the copy of this judgment. Revision file be consigned to Record Room as per rules.
Dictated and Announced in open Court on 06.02.2025 (Lovleen) ASJ-03 (South East) Saket Courts, Delhi Digitally signed by LOVLEEN LOVLEEN Date:
2025.02.06 16:54:36 +0530 CR Rev No. 69/2024 Sharad Kedia vs M/s. Avanti Learning Centre Pvt. Ltd. 17/17