Delhi District Court
Sh. Atul Kumar Jain vs Sh. N.K. Jain on 5 June, 2023
Object 2
1
1
IN THE COURT OF MS. TWINKLE WADHWA:
ADDITIONAL DISTRICT JUDGE 04 - SOUTH EAST
DISTRICT, SAKET COURTS, NEW DELHI.
In the matter of:
CS DJ NO: 210028/2016
SH. ATUL KUMAR JAIN
S/o. Sh. A.P. Jain,
R/o. B-1/9, Vasant Vihar,
Delhi .......Plaintiff
versus
SH. N.K. JAIN,
S/o Late Sh. N.C. Jain
(Sole Proprietor)
N.A. Jain Associates,
Chartered Accountants,
J-36, First Floor,
Lajpat Nagar-II,
New Delhi-110024
Also At,
M-15, 1st Floor,
Lajpat Nagar-III,
New Delhi - 110024 ......Defendant
Date of Institution : 21.10.2011
Judgment reserved on : 09.05.2023
Judgment announced on : 05.06.2023
Decision : DECREED
In the matter of:
CS DJ NO. 210029/2016
SH. N.K. JAIN,
S/o. Late Sh. N.C Jain,
R/o. M-15, First Floor,
Lajpat Nagar-III,
New Delhi - 110024 ....Plaintiff
versus
210028/2016 & 210029/2016
2
SH. ATUL KUMAR JAIN
S/o. Sh. A.P. Jain,
R/o. B-1/9, Vasant Vihar,
New Delhi - 110057 ....Defendant
Date of Institution : 14.09.2011
Judgment reserved on : 09.05.2023
Judgment announced on : 05.06.2023
Decision : DISMISSED
JUDGMENT
1. By this common Judgment, I shall dispose off two suits which are between the same parties titled as "Sh. Atul Kumar Jain Vs. Sh. N.K. Jain (suit No. 210028/2016)" and "Mr. N.K. Jain Vs. Mr. Atul Kumar Jain (suit No. 210029/2016)".
2. Suit No. 210028/2016-: This is a suit for recovery of Rs. 25 Lacs filed by plaintiff- Sh. A.K. Jain against the defendant Sh. N.K. Jain thereby claiming the following reliefs:
A). A decree for an amount of Rs. 25,52,175/- alongwith interest @ 18% per annum from the date of institution of the suit till realisation.
B). Costs of the suit
3. Suit no: 10029/2016: This is a suit for declaration, permanent injunction and cancellation of cheques and documents whereby the following reliefs have been claimed:
A. Pass a decree of declaration thereby declaring the cheques in question, blank forms and documents signed by Sh. N.K. Jain and handed over to Sh. A.K. Jain, as null and void and are liable to the 210028/2016 & 210029/2016 3 cancelled.
B. Pass a decree of permanent injunction restraining the defendant from presenting the said cheques for encashment and from misusing the blank forms and documents which are in possession of defendant Sh. A.K. Jain.
The facts of case of plaintiff/ Sh. A.K. Jain
4. The present is a suit for recovery of Rs. 25 Lacs with interest, being filed by plaintiff Sh. A.K. Jain against the defendant u/o. 37 CPC. However, vide detailed order dt 13.11.2013 the leave to defend application was allowed and the suit was converted into an ordinary suit for recovery.
5. It is the case of plaintiff Sh. A.K. Jain that he is an Engineer from IIT Kanpur, having vast knowledge in the field of property valuation/assessment. The defendant, who is a Chartered Accountant, approached the plaintiff for valuation/assessment of certain properties during the year 2010-2011.
6. It is pleaded that on the request of the defendant, the plaintiff rendered his services and evaluated/made assessment in respect of various properties in and around Delhi and submitted his report to the defendant. The valuation/ assessment report on record was also given to the defendant as it was represented by defendant that he requires it for the consultation services for his various clients. It was represented to the plaintiff that valuation/assessment reports are confidential records and only defendant can retain the same.
7. After providing his services, the plaintiff raised a bill dt 01.04.2011 for a sum of Rs. 27 Lacs upon the defendant. The bill in original was handed over to the defendant and carbon copy was 210028/2016 & 210029/2016 4 retained by the plaintiff, after acknowledgement on the same by the defendant. In discharge of his liability, the defendant issued various cheques, details of which are mentioned in para 5 of the plaint. These cheques were issued by the defendant in discharge of his admitted liability. These cheques are also mentioned at the back side of the bill which is signed by the defendant. This fact is evidenced on the carbon copy of the bill which is retained by the plaintiff.
8. However before the first cheque could be presented for payment in June, 2011, the defendant approached the plaintiff and requested him not to present the first cheque and also handed over to him Rs. 2 lacs in cash for which a receipt was duly issued by the plaintiff. The defendant assured the plaintiff that he needs time to arrange the funds and his dues will be paid. Believing his representation, plaintiff did not present the first cheque of Rs.31,00,000/-. However, the defendant did not make payment of balance dues of Rs. One Lac.
9. In the meantime, second cheque became due which bounced on presentation with the remarks "funds insufficient". Thereafter the plaintiff issued a legal notice dt 03.08.2011 to the defendant which was served upon the defendant by Speed Post/RAD post. Thereafter third cheque of Rs. 4 Lacs was presented on 11.08.2011, which was again dishonored with the remarks "Drawer has stopped payment". In the meantime, the plaintiff received reply to his legal notice dt 03.08.2011 wherein the defendant admitted his liability but took an absolutely different stand.
210028/2016 & 210029/2016 5
10. As the defendant had stopped payment of third cheque and has also informed the plaintiff that he has also instructed his bank to stop payment in respect of the remaining cheques, thus the plaintiff instructed his counsel to file a suit for recovery of the admitted liability. His counsel prepared a draft which was sent to plaintiff through email dt 05.09.2011, however as the plaintiff was busy with the family affairs, he could not finalise the plaint. In the meantime the plaintiff received a notice of the suit filed by defendant against the plaintiff and summons of the said suit were served upon him on 18.10.2011.
11. It is submitted that the defence taken by the defendant in the said suit is that he had given cheques in question for the purposes of booking of some flats on behalf of defendant-Sh. N.K. Jain and he had given certain blank forms/papers to the plaintiff for the purpose of booking. It is denied by defendant in the said suit that any work was done by the plaintiff for him. Such plea taken by the defendant is absolutely baseless and concocted. It is further submitted that defendant is a Chartered Accountant having 33 years of experience. It is unlikely that an experienced Chartered Accountant with such a vast experience will give cheques in the name of plaintiff for booking of flats with the third party. Further, it is not explained why cheques were given in the name of plaintiff instead of Builder. Further, defendant is a Chartered Account who is aware that such transactions are benami transactions which are prohibited under the provisions of Benami Transaction Act.
12. It is pleaded that the bill which was raised by the plaintiff dt 01.04.2011 was received by the defendant under his own 210028/2016 & 210029/2016 6 signatures where he has noted "Received and Cleared bill" and has signed the same also. This endorsement cannot be said to be a mere endorsement on a blank paper. Further on the back side of the said document, details of the cheques are also mentioned which are counter signed by the defendant. No prudent Chartered Accountant having 33 years of experience would sign the same paper in blank on both the sides. No explanation is given by the defendant regarding the same. It is pleaded that the cheque given to plaintiff were filled by the defendant in his own handwriting. The plea of defendant is also false that relationship between the plaintiff and son of the defendant were strained because of financial losses caused by his son. Further if such an argument is true, no prudent person would give cheques to the plaintiff as well as sign on the blank forms. Further the defendant is silent about his signatures and endorsement on the bill dt 01.04.2011. It is further submitted that the forms for booking of flat with any Builder are specific forms made by the Builders in accordance with their individual project and scheme. The question of signing of blank papers for the purpose of booking of flat does not arise.
13. Further the defendant is a Chartered Accountant having 33 years of experience who must be aware that at the time of booking of flats, copies of I'd proofs, PAN Card, Photographs etc were also required, which were not supplied by the defendant. In the absence of these documents, no Builder will accept the forms. Further it is very strange that defendant has not kept a copy of the alleged forms given to the plaintiff.
210028/2016 & 210029/2016 7
14. Further if it is the case of defendant that he had signed any blank papers as alleged, then he has not furnished any explanation about the endorsement made by the plaintiff on the first page and on the acknowledgement made by him on the same paper on the back side.
15. It is further submitted that the defendant had dishonest intention from the very beginning and for this reason, at the time of settlement of accounts on 01.04.2011, he demanded the entire original record alongwith the rough sheets and also all incidental papers with regard to valuation/assessment of properties and has taken the same under acknowledgement from the plaintiff, noting on the bill is indicative of this fact. While taking the entire material from the plaintiff, the defendant also took an undertaking from the plaintiff that he shall not retain any record for the same. This was done by plaintiff under the garb of maintaining secrecy and confidentiality of the valuation/assessment conducted by plaintiff for the clients of defendant.
16. It is submitted that after obtaining all the records, the defendant had sought directions from the Court in the connected case for production of the records of the work done by him. It is submitted that from the conduct of defendant, it is clear that he had dishonest intentions right from the very beginning. It is submitted that defendant's financial condition is not so good due to which it appears that he has turned dishonest.
17. As per the own case of defendant, the dispute between the parties arose in May, 2011 but the defendant did not take any steps either for return of the cheques or to instruct his bank to stop 210028/2016 & 210029/2016 8 payment. Steps were taken by the defendant after receiving the legal notice dt 03.08.2011 from the plaintiff and also after dishonor of the first cheque in July, 2011. Hence the present suit is filed for recovery of Rs. 25 lacs alongwith interest @ 12% p.a.
18. In this case, unconditional leave to defend was granted to the defendant vide order dt 13.11.2013 thereby directing the defendant to file W.S within 30 days. However, W.S was filed after 222 days and hence the application for condonation of delay was dismissed vide order dt 17.03.2015 and W.S was not taken on record. However, defendant had filed a separate suit against the plaintiff. The Case of defendant/ Sh. N.K. Jain.
19. The suit titled as N.K. Jain Vs. A.K. Jain bearing CS DJ No. 10029/2016 was filed by Sh. N.K. Jain against Sh. A.K. Jain for declaration, permanent injunction and cancellation of the cheques and documents issued by him in favour of Sh. A.K. Jain.
20. It is the case of defendant Sh. N.K. Jain, as is pleaded in a separate suit filed by him, that he is a Chartered Accountant having 33 years of experience and has a huge name and an envious reputation in the society.
21. It is the case of defendant that plaintiff Sh. A.K. Jain is well known to the plaintiff and he came in contact with the plaintiff 7-8 years back and during this period, he became well known to the family, relatives and close friends of plaintiff. It was represented by plaintiff to him that he was a man having huge expertise in the field of real estate, property development, property projects in NCR and also worked with organizations like Unitech Ltd, Vipul Infrastructure and also is in his own freelance business of 210028/2016 & 210029/2016 9 development of properties, investment etc in various immovable projects.
22. The relationship between the parties was so close that the defendant gave a job to the wife of Sh. A.K. Jain-Smt. Renu Jain in his office and she worked with the defendant in the year 2005- 2007 and was drawing the salary of about 13,000/- per month. Further the plaintiff used to visit the office of defendant at least 3- 4 times in a month and both were having strong and close ties.
23. Sh. A.K. Jain was also running a share trading account through the son of defendant namely Sh. Madhur Jain. However, on account of collapse of the share market in the 2005-2006, Sh. A.K. Jain suffered certain losses in the aforesaid investments after which he closed the account. After this incident, the plaintiff started maligning the image of son of the plaintiff thereby saying that he suffered losses because of him.
24. Though the relations between the plaintiff and son of defendant Sh. A.K. Jain were sour, yet the plaintiff and defendant maintained good relations amongst themselves as they were known to each other since long and had common friends and acquaintances.
25. Towards the end of 2010, the plaintiff represented to the defendant that there were huge business opportunities for investment in immovable properties and induced the defendant to make investments in immovable properties on the advice of plaintiff. It was also represented to the defendant that plaintiff himself has been investing in schemes floated by top builders like DLF, Unitech, Ansals etc. Further, he also invested in pre-
210028/2016 & 210029/2016 10 launched bookings and if investment is done at the first opportunity, huge profits could be earned in 2-3 months on transfer of booking.
26. The plaintiff explained the entire scheme to the defendant and induced him to sign on various blank forms and papers alongwith two blank signed cheques. It was represented to the defendant that as and when the plaintiff will apply on behalf of defendant in any such scheme, the defendant can arrange for encashment of cheques. It was decided that Sh. A.K. Jain-plaintiff will take 33% of the profits earned from such investments and balance will be kept by defendant. However for 4-5 months, nothing was heard from the plaintiff despite repeatedly asking about the scheme. The plaintiff represented to him that there has not been any appropriate opportunity and he will inform him as and when suitable opportunity arises.
27. Somewhere in the last week of April, Sh. A.K. Jain represented that he got some good investment opportunities with DLF, Unitech etc and he will periodically invest in pre-launch bookings. Sh. A.K. Jain/plaintiff represented to him that he did not have good experience with some of his relatives during past few months on account of which he will do all future investment in his own name and share profits. It was projected that this was a sound mechanism of making speedy and quick investments, and that his interest will also be protected. Sh. N.K. Jain also did not suspect Sh. A.K. Jain due to the trust between the parties. The plaintiff returned the earlier two cheques and asked the defendant to issue some cheques of Rs. 3 lacs and some for Rs. 4 Lacs in the 210028/2016 & 210029/2016 11 name of plaintiff on the pretext that he will make the investment in his own name in next six months and rotate the money and pay 70% of the profits to Sh. A.K. Jain earned from investment of plaintiff. Further he apprised to the defendant that as and when he will present the cheque, he will inform the defendant to make arrangement for cash in his account. Hence, the defendant was induced to handover these seven cheques to the defendant.
28. On account of close ties between the parties, defendant did not insist for any kind of documentation. Also when two cheques were returned to defendant, the plaintiff was requested to return the blank forms and papers as well, but plaintiff stated that he shall return the same during his next visit. Due to cordial relations between the parties, defendant did not suspect any foul play. Thus representations were made by plaintiff in April, 2011 in the office of defendant in presence of one other common friend namely Sh. Anil Kaura. In May, 2011, when the plaintiff visited the office of defendant, the plaintiff entered into unwarranted confrontation with defendant's son-Sh. Madhur Jain. The defendant was not present at that time. Later on defendant came to know that plaintiff extended all kinds of threats to his son. The defendant was shocked to receive legal notice from defendant dt 03.08.2011 wherein the case set up by the plaintiff is absolutely false and bogus.
29. The defendant is a Chartered Accountant and has never undertaken any project or job of valuation of properties. Hence the question of availing the services of plaintiff for evaluation/assessment does not arise. Further, in his legal notice, 210028/2016 & 210029/2016 12 the plaintiff has not mentioned the details of the properties for which he is doing valuation, details of the clients, date of evaluation, date of survey, purpose of survey and other ancillary details. The plaintiff has fraudulently presented one cheque in the bank account of the defendant, which was dishonoured. There is no liability existing in favour of plaintiff at all. It is pleaded that the entire story set up by the plaintiff in legal notice is false and concocted. The averments made therein are denied. It is pleaded that the defendant has misused one cheque and is likely to misuse the other cheques. The cheques have become null and void without consideration and hence the present suit is filed thereby seeking a declaration that the seven cheques be declared as null and void and are liable to be cancelled. A decree of permanent injunction is also sought thereby restraining Sh. A.K. Jain from presenting the said cheques for encashment.
30. In his W.S, Sh. A.K. Jain has reiterated his case as is mentioned in the suit filed by him titled as "A.K. Jain Vs. Sh. N.K. Jain".
Proceedings of the case.
31. From the pleadings of the parties, the following issues were framed vide order dt 23.03.2015 in CS (OS) 2617/2011 :
i). Whether the plaintiff gave blank signed papers or forms to the defendant ? OPP
ii). Whether the cheque bearing Nos. 111125-111131 drawn on Punjab National Bank, Lajpat Nagar, New Delhi as given by the plaintiff to the defendant were for booking of the flat ?
OPP 210028/2016 & 210029/2016 13
iii). Whether the bill dated 01.04.2011 of an amount of Rs. 27,00,000/- as raised by the defendant on the plaintiff is forged and fabricated ? OPD
iv). Whether the plaintiff is entitled to get decree as prayed for ? OPP
v). Relief.
32. From the pleadings of the parties, the following issues were framed vide order dt 17.07.2015 in CS (OS) 2242/2011 :
i) Whether plaintiff Sh. N.K. Jain gave blank signed papers and cheques as stated in the plaint, and for the purposes as stated in the plaint, to the defendant? OP Sh. N.K. Jain.
ii) Whether the defendant Sh. Atul Kumar Jain was entitled for encashment of the cheques totalling to a sum of Rs. 27 lacs as per the defence of Sh. Atul Kumar Jain? OP Sh. Atul Kumar Jain.
iii) To what relief including interest, if any, the plaintiff is entitled to ?
33. Vide order dt 27.03.2014 passed in suit no. 10029/2016, both the suits were consolidated for the purposes of evidence. Evidence led on behalf of the parties.
34. PW1(in suit no. 10028/2016)- is Sh. Atul Kumar Jain, who tendered his evidence by way of affidavit Ex.PW1 and relied upon the following documents:-
Cheque dt 07.06.2011 Ex.PW1/2
Cheque dt 07.09.2011 Ex.PW1/3
Cheque dt 07.10.2011 Ex.PW1/4
Cheque dt 07.11.2011 Ex.PW1/5
Cheque dt 07.12.2011 Ex.PW1/6
Receipt dt 06.06.2011 Ex.PW1/7
210028/2016 & 210029/2016
14
Return memo dt 21.07.2011 Ex.PW1/8
Return memo dt 18.08.2011 Ex.PW1/9
Legal notice dt 03.08.2011 Ex.PW1/10
Reply dt 18.08.2011 Ex.PW1/11
35. During his cross-examination, the PW1 has tendered the copies of his Income Tax Returns for the Assessment years 2010-2011, 2011-2012 and 2012-2013 as Ex.PW1/12.
36. Sh. N.K. Jain examined himself as PW1 (in suit no.
10029/2016) and tendered his evidence by way of affidavit Ex.PW1/A. He relied upon the following documents:-
i). Copy of Notice dt 03.08.2011 Ex.PW1/1
issued on behalf of defendant
ii). Copy of Reply to the notice Ex.PW1/2.
dt 18.08.2011
iii). Copy of letter dt 16.08.2011 Ex.PW1/3.
issued to PNB
iv). Copy of letter dt 19.08.2016 Ex.PW1/4.
issued to PNB
37. PW2 is Sh. Madhur Jain (in suit no. 10029/2016), who tendered his evidence by way of affidavit Ex.PW2/A. Arguments on behalf of Sh. Atul Kumar Jain.
38. It is argued by counsel for plaintiff that Ex.PW1/1 bears signatures of defendant on both the sides. It is submitted that the defendant is a Chartered Accountant with sufficient experience. It is inconceivable that any Chartered Accountant would sign a document in blank on both the sides. Hence the story of blank signed paper does not inspire any confidence.
39. It is submitted that in the suit filed by the present plaintiff, the defence of defendant is struck off. It is submitted 210028/2016 & 210029/2016 15 that defendant Sh.N.K. Jain filed this suit after legal notice was given to him by the present plaintiff and before that, Sh. N.K. Jain did not take any steps to get the cheques stopped nor he filed any police complaint in respect of the same. It is submitted that as per the practice and procedure, the plaintiff was required not to keep any copy of the report submitted by him which is noted in Ex.PW1/1. Hence the copy of reports could not be filed on record. It is submitted that in Ex.PW1/1, first the defendant denied his signatures, then accepted his signatures but did not explain the words which are mentioned therein i.e. "receipt and clear bill."
40. It is submitted that only when plaintiff sent legal notice to him, Sh. N.K. Jain filed a suit before Hon. High Court of Delhi thereby restraining the plaintiff from presenting the said cheques. It is submitted that there is no specific denial or explanation by defendant after the words - receipt and clear bill on Ex.PW1/1 and hence it is deemed admission. Reliance is placed on judgment passed by Hon'ble Supreme Court in case titled as Gian Chand and Brothers and Another Vs. Rattan Lal alias Rattan Singh cited as (2013) 2 SCC 606.
41. It is submitted that it is the claim of defendant that the entire transaction had taken place in front of one Mr. Vohra and his evidence affidavit was also filed on record, but he never stepped into the witness box.
42. It is further argued that it is mentioned in evidence affidavit of defendant that his son was also present at the time of transaction, however, it is not mentioned in the pleadings. It 210028/2016 & 210029/2016 16 is submitted that during his cross-examination, the defendant admitted that his son was asked to leave the meeting and it is admitted that no third person was present in the meeting, hence his son is not an eye witness. It is submitted that once it is admitted by defendant that he has duly filled up the cheque and also put signatures thereon, there is a presumption in favour of plaintiff as per NI Act. The onus is on the defendant which he has failed to discharge. It is submitted that it is not proved by the defendant that the cheques were issued without consideration, as the onus to prove the same was upon the defendant. It is submitted that signatures on blank papers are not explained by the defendant. Further if the amount was given by defendant for flat to be booked in his name, then the defendant in such case, should have issued the cheque in the name of plaintiff. Further, there is no explanation why it was done on monthly basis as seven cheques were issued. Further, no details of the flat to be booked have been filed on record by the defendant, hence no explanation by the defendant for issuing of monthly cheques is given. It is submitted that as per the case of defendant, the flat was to be booked in the name of plaintiff which is Benami transaction and the same is hit by provisions of Benami Transaction Act.
43. Further, it is the case of defendant that he wanted to invest Rs. 27 Lacs and questions were asked from him during his cross-examination regarding the same but he has not been able to produce his account books to show that Rs. 27 Lacs were available with him. Further the defendant was required 210028/2016 & 210029/2016 17 to maintain account as per section 44-AA of Income Tax Act which he is not maintaining and he being a Chartered Accountant must be aware of it. It is further argued that it has been observed by Supreme Court of India in the judgment titled as Frost International Ltd. Vs. Milan Developers and Builders (P.) Limited & Anr. in Civil Appeal No. 1689 of 2022 decided on 01.04.2022 that such suit filed by defendant thereby restraining the plaintiff from initiating legal proceedings u/s. 138 of NI Act or any provisions of law, is not maintainable. Hence the suit filed by Sh. N.K. Jain is liable to be dismissed. It is submitted that since the defence of defendant was struck off and on merits also, the suit of plaintiff is liable to be dismissed.
44. It is argued that it is the case of defendant that plaintiff has not rendered any services to the defendant hence he is not liable to make any payment towards the same. However, it is submitted that as the defendant has not led any evidence in the matter to rebut the contents of the plaint, hence the submission are not maintainable. It is submitted that onus was on the defendant to prove the same which they have failed to discharged. Reliance is place on judgment of Supreme Court titled as Kalamani Tex and Ors. Vs. P. Balasubramanian in Criminal Appeal No. 123 of 2021 decided on 10.02.2021. Arguments on behalf of Sh. N.K. Jain.
45. It is submitted by counsel for defendant that in the suit filed by Sh. A.K. Jain, it is submitted that in the order dt 13.11.2013, it is mentioned in para 13 that plaintiff has been 210028/2016 & 210029/2016 18 given time to give details of the work done by him and further it was observed in para 17 regarding the invoice relied upon and exhibited as Ex.PW1/1. It is argued that after making observation in the order dt 13.11.2013, regarding the work done by plaintiff, the details of which were not mentioned nor brought on record, unconditional leave to defend was granted to the defendant. Hon. High Court of Delhi consolidated both the suits vide order dt 27.03.2014 and thereafter it was observed by Hon. High Court of Delhi vide order dt 17.07.2015, in para 3 that it makes no difference if Sh. N.K. Jain's defence stands struck off.
46. It is further argued that as is mentioned in his cross-
examination that he has done valuation of property of Rs. 9.5 crores but he has failed to produce any single document regarding the work done by him. It is further argued that in the cross-examination of plaintiff, he has stated that he maintains and does work of computers but he has failed to furnish any copy of the report/work done by him. It is submitted that plaintiff has failed to give break-up of Rs. 27 Lacs for which the present suit is filed by him. It is not explained what rate he has charged, for how many properties he has charged, the said details are lacking. It is submitted that Sh. A.K. Jain in his evidence affidavit has stated that he is a Civil Engineer, however a Civil Engineer is not authorised to do assessment/valuation work of properties. Further, he is not having any licence to carry out the work. It is argued that Sh. A.K. Jain claims that he has done valuation of 7-8 properties 210028/2016 & 210029/2016 19 but he has not given any details of the said properties nor has filed any such document on record to show the kind of work/valuation done by him.
47. It is further argued that during the cross-examination of defendant, Sh. N.K. Jain or that of his son, no questions were put to them regarding the services rendered by the plaintiff. No question regarding the work done were put during cross- examination.
48. It is argued that the suit filed by defendant is not for seeking declaration thereby restraining the plaintiff from filing a suit, rather the relief sought by the plaintiff is for restraining the defendants from presenting the cheques in question. Arguments of Sh. A.K. Jain
49. In rebuttal, it is argued by counsel for Sh. A.K. Jain that observations were made regarding the invoice by Hon. High Court of Delhi because at that time the invoice was not proved and denied by defendant. However, during cross-examination, defendant admitted his signatures on the invoice, hence the invoice stands proved.
50. It is further argued that it is mentioned in the invoice itself that defendant has taken all the rough sheets, reports and documents also, hence the plaintiff was not able to produce any document in his support.
51. It is further argued by counsel for Sh. A.K. Jain that defendant tried to point out the dispute with his son Sh. Madhur Jain. Further during his cross-examination, he has stated that the dispute with his son was in the year 2005-2006 210028/2016 & 210029/2016 20 whereas the present transaction pertains to the year 2010. It is submitted that he admitted that plaintiff and wife of defendant had cordial relations during this period, which shows that the relations between the parties were normal. It is submitted that in the cross-examination of Sh. A.K. Jain, which was conducted on 24.08.2015, in question no. 59, he has given the details of the properties and the work done by him. It is submitted that further details are also given by plaintiff in response to question no. 71 & 72.
52. The attention of the Court is drawn to Question No. 128, 129, 158 and 160 to show the work done by plaintiff. It is argued that as far as the contention that defendant was a Civil Engineer and cannot do valuation is concerned, such question has not been put to Sh. A.K. Jain during his cross-examination. It is further argued that no license was required by plaintiff Sh. A.K. Jain for Assessment/ Valuation work. It is submitted that defendant has failed to point out any law under which license is required.
Findings of the Court
53. It is the case of Sh. A.K. Jain that cheques were issued in his favour by Sh. N.K. Jain towards the work done by him. Sh. N.K. Jain admitted to have given the cheques though for a different reason. Once there are cheques issued in favour of Sh. A.K. Jain, there is a presumption in favour of plaintiff/ Sh. A.K. Jain that they were issued for lawful consideration the onus was on defendant/ Sh. N.K. Jain to show that these cheques were not issued towards a lawful consideration. Hence 210028/2016 & 210029/2016 21 onus to prove his case was on Sh. N.K. Jain.
54. Sh. N.K. Jain has taken the defence that the cheques were issued for the purpose of booking of flats on the representation of Sh. A.K. Jain that it will be more convenient if Sh. A.K. Jain invests in his own name on behalf of Sh. N.K. Jain. Sh. N.K. Jain has been practicing Chartered Accountant for last 33 years or more. He, being a Chartered Accountant, was aware that such transactions are prohibited by Benami Transactions Act. Hence stand taken by defendant that the cheques were given for the purpose of investment by him in the name of some other person is against the Law and Law does not favour such litigants who file claims for unlawful transactions.
55. Further the defence pleaded by Sh. N.K. Jain of issuing cheques of Rs. 27 lacs in advance for the purpose of an investment which is yet to take place especially, without giving details of the investment for which these cheques were to be used, does not inspire any confidence. It is not stated by Sh. N.K. Jain that what was the business opportunity for which these cheques were issued. It is unlikely that a Chartered Accountant would issue such cheques on a mere representation of someone that he will invest such amount on his behalf.
56. Further why the cheques have been given monthly for next 7 months is also not explained. Sh. N.K. Jain himself is Chartered Accountant and he could have invested in any project himself as he is well versed with all the nitty grities of investment himself. It is the own case of Sh. N.K. Jain that Sh. A.K. Jain is only a civil engineer and does not have any 210028/2016 & 210029/2016 22 qualification to give opinion or to invest in real estate. If Sh. A.K. Jain did not have sufficient qualification for investment as he was a mere civil engineer, it is all the more unlikely that an experienced Chartered Accountant like Sh. N.K. Jain would give him his money for investment in real estate. Further it is the own case of Sh. N.K. Jain that he wanted to invest money to the extent of Rs. 27 lacs. However he has not filed his bank account statement to show that he had money worth Rs. 27 lacs in cash in his bank on the date when he issued these cheques nor he has filed his books of account to support the claim that he had Rs. 27 lacs to invest. He is even unable to show that he had income to the extent of Rs. 27 lacs which he wanted to invest through Sh. A.K. Jain.
57. Further the defence taken by Sh. N.K. Jain is that on the advice of Sh. A.K. Jain, he agreed to invest in the name of Sh. A.K. Jain. However there is no cogent explanation given by Sh. N.K. Jain why he was not willing to invest in his own name. It is not pleaded anywhere by him the exact reason for not investing in his own name. Sh. N.K. Jain has failed to file his books of account on record thereby showing that he had such a huge income that he was looking for avenues to invest in someone else name. There is no cogent explanation coming from Sh. N.K. Jain who is an experienced Chartered Accountant in support of plea taken that he wanted to invest in the name of Sh. A.K. Jain.
58. Further there is a plea taken by Sh. N.K. Jain that his signatures were taken on blank paper and it is stated by him 210028/2016 & 210029/2016 23 that Ex. PW1/1 bears his signature at point A. However it is submitted by him that writing of the words above his signature are not in his hands. He has also denied his signatures at the back of the Ex. PW1/1. It is quite unlikely that an experienced Chartered Accountant would give blank signed papers to anyone. A Chartered Accountant is very well aware of the implications of signing a blank paper and that they are very prone to misuse. He is not a common business man who could have taken such plea. The theory of signing blank paper also does not inspire any confidence. Further it is the own case of Sh. N.K. Jain that they were meeting three to four times in a month. If parties were meeting this often, what was the need to give seven cheques in advance for next seven months.
59. Also, Sh. N.K. Jain had given 7 cheques in advance for the purpose of investing in real estate, these cheques bearing a specific date. Sh. N.K. Jain were aware of the date and month when they were likely to be presented. He could have easily informed Sh. A.K. Jain in advance not to present these cheques as if the cheques are dishonoured in a bank account, the rating of that bank account goes down for all purposes in the records of CIBIL. The first cheque was presented on 16.07.2011 when it was bounced ( there is noting at the back of the cheque) and the second cheque was presented on 12.08.2011. But Sh. N.K. Jain did not take any steps immediately after dishonour of the first cheque to get the cheques stopped nor took action against Sh. A.K. Jain as he presented the cheques without his consent.
210028/2016 & 210029/2016 24
60. Further it is the specific plea of Sh. A.K. Jain that forms to be filled in real estate are builder specific. It is not explained by Sh. N.K. Jain why he had given blank signed papers. I am in agreement with the submissions made. Sh. N.K. Jain is an experienced Chartered Accountant who is well aware that forms to be filled for the purpose of investment with builders like Unitech, Supertech etc. which are mentioned in the pleadings, have their own respective performas to be signed. Once the specific plea is taken by Sh. A.K. Jain, the onus was on Sh. N.K. Jain to explain for what purpose these blank signed papers were given, where were they likely to be used but the same is not explained by Sh. N.K. Jain anywhere.
61. In view of the above discussion, where Sh. N.K. Jain admits his signatures but denies the contents of invoice Ex. PW1/1, in view of the fact that he admits to have issued these cheques and the fact that the facts pleaded by him do not inspire any confidence, the suit of Sh. A.K. Jain is liable to be decreed.
62. It is the defence taken that the Ex. PW1/1 which is invoice generated by Sh. A.K. Jain is a handwritten one, it does not bear a bill number, does not contain details of properties, does not contain service tax registration number or PAN number.
63. As far as Ex. PW1/1 is concerned, the question was put to Sh. A.K. Jain regarding the same. He was not asked to produce his service tax assessment proof during the relevant period from 2009-2011. Further in answer to question no. 177/178, he has explained why it was written on plain paper.
210028/2016 & 210029/2016 25 Hence the argument that this is a hand written bill which cannot be relied upon does not hold good as it has already been explained by Sh. A.K. Jain in his cross-examination why and in what circumstances this handwritten invoice was written.
64. Further it is the argument of Sh. N.K. Jain that the bill of Rs. 27,00,000/- does not contain break up of the amount. It is not explained that against valuation of which property how much amount was raised. However the same is explained by the witness in cross-examination that this bill was made as per the requirements and convenience of Sh. N.K. Jain.
65. As far as the case filed by Sh. N.K. Jain is concerned, it is the argument of opposite Counsel that the same is not maintainable and such injunction cannot be granted. It is pertinent to quote here the judgment of Frost International Ltd. Vs. Milan Developers and Builders (P.) Limited & Anr. in Civil Appeal No. 1689 of 2022 decided on 01.04.2022 :
"34. In the instant case, on a reading paragraph 13 of the plaint, it is evident that cheque issued had been dishonoured and defendant no.1 had issued notice under Section 138 of N.I. Act on 10th June, 2009, to the plaintiff and its Managing Director replied to the same through their advocate on 23rd June, 2009. Therefore, it is evident that the plaintiff by seeking the aforesaid reliefs is in substance frustrating the right of defendant no.1 to take steps under the provisions of N.I. Act for releasing the amount of cheque issued by the plaintiff to defendant no.1 for a sum of Rs. 56 lakhs by filing a civil suit and/or by initiating a criminal prosecution. In other words, by seeking such a declaration that the cheque was issued as a security and that the same was illegally handed over by defendant no.2 to defendant no.1 in violation of the terms and conditions of the MoU, the plaintiff in substance is making an attempt to frustrate proceedings being initiated under Section 138 of the N.I. Act or for recovery of the amount by filing a civil suit."
210028/2016 & 210029/2016 26 "35. On a holistic reading of the plaint and on consideration of the reliefs sought by the plaintiff, we find that the said reliefs are barred by law inasmuch as no plaintiff can be permitted to seek relief in a suit which would frustrate the defendants from initiating a prosecution against plaintiff or seeking any other remedy available in law. In fact, the attempt made by the plaintiff to seek such a declaratory relief is, in substance, to seek a relief of injunction against the defendants, particularly defendant no.1, but framed it in the nature of a declaratory relief. In other words, the plaintiff has sought an injunction against defendant no.1 from seeking remedies in law on account of the cheque issued by the plaintiff for a sum of Rs. 56 lakhs being dishonoured."
"37. Moreover, the right of defendant no.1 to prosecute the plaintiff owing to the dishonour of the cheque issued by the plaintiff for a sum of Rs. 56 lakhs cannot be frustrated by seeking a declaration that the said cheque was handed over as a security. Such a declaration cannot be ex facie granted as it would be contrary to the provisions of the N.I. Act and particularly Section 118(a) thereof. If the plaintiff is aggrieved on account of breach of the terms and conditions of the MoU committed by defendant no.1 then it could seek appropriate reliefs in accordance with law. Whether the plaintiff was not liable to issue the cheque for Rs. 56 lakhs to defendant no.1 under the terms of the MoU is a matter which has to be considered in an appropriate proceeding to be initiated by defendants on account of dishonour of the said cheque under Section 138 of the N.I. Act. The plaintiff can always prove that it had no legal liability or debt to be discharged vis-a-vis defendant no.1 under the terms of the MoU, if any proceeding is to be initiated by defendant no.1 on account of the dishonour of the said cheque. Further, if defendant no.1 is to seek any relief for the non-supply of 3876 MT of iron ore fines by the plaintiff under the very same MoU then the plaintiff is entitled to take appropriate defences as are available in law. If the plaintiff has a grievance against the defendants and particularly defendant no.1, arising from the MoU, such prayers have not been sought by the plaintiff. Such reliefs could have been sought by the plaintiff inasmuch as there is no prayer seeking recovery of Rs. 21.50 lakhs from defendant no.1 which according to the plaintiff is due to it."
In view of above discussion, the relief sought by Sh. N.K. Jain that Sh. A.K. Jain be restrained from presenting the cheques 210028/2016 & 210029/2016 27 for encashment cannot be granted to him. Further in view of above discussion, the other relief sought by Sh.N.K. Jain for declaration that the cheques, blank forms and documents signed by plaintiff be declared as null and void is also declined to him as it is not proved that any blank forms and documents were given. Also Sh. N.K. Jain failed to prove that the cheques given were not for any lawful consideration.
66. Issue Wise Findings :
i). Whether the plaintiff gave blank signed papers or forms to the defendant ? OPP Sh. N.K. Jain had failed to prove that he had given blank signed papers to Sh. A.K. Jain. It is not explained that if the blank papers were misused, why Sh. N.K. Jain did not take any steps on time regarding the same. No police complaint is filed. No steps taken till legal notice is issued by Sh. A.K. Jain. Hence this issue is decided against Sh. N.K. Jain.
ii). Whether the cheque bearing Nos. 111125-111131 drawn on Punjab National Bank, Lajpat Nagar, New Delhi as given by the plaintiff to the defendant were for booking of the flat ? OPP The onus to prove this issue was on Sh. N.K. Jain. As observed above, Sh. N.K. Jain has failed to prove this issue, hence this issue is decided against Sh. N.K. Jain.
iii). Whether the bill dated 01.04.2011 of an amount of Rs.
27,00,000/- as raised by the defendant on the plaintiff is forged and fabricated ? OPD Sh. A.K. Jain has been able to prove that this bill dated 01.04.2011 210028/2016 & 210029/2016 28 is not a forged one. This issue is decided in his favour.
iv). Whether the plaintiff is entitled to get decree as prayed for ? OPP In view of above discussion, the suit filed by Sh. A.K. Jain is liable to be decreed and suit filed by Sh. N.K. Jain is liable to be dismissed.
v). Relief.
In view of above discussion, a money decree of Rs. 25,00,000/- is hereby passed in favour of Sh. A.K.Jain and against Sh. N.K. Jain, along with interest @ 13 per cent per annum from the date of legal notice dated 03.08.2011. One time litigation cost of Rs. 1,00,000/- is also awarded in favour of plaintiff including court fee and litigation charges. In view of above discussion, the suit filed by Sh. A.K. Jain is liable to be decreed and suit filed by Sh. N.K. Jain is liable to be dismissed.
67. Findings on the issues which were framed vide order dt 17.07.2015 in N.K. Jain Vs. Atul Kumar Jain bearing CS (OS) No. 2242/2011 :
i) Whether plaintiff Sh. N.K. Jain gave blank signed papers and cheques as stated in the plaint, and for the purposes as stated in the plaint, to the defendant? OP Sh. N.K. Jain.
Sh. N.K. Jain failed to prove this issue. This issue is decided against him.
ii) Whether the defendant Sh. Atul Kumar Jain was entitled for encashment of the cheques totalling to a sum of Rs. 27 lacs as per the defence of Sh. Atul Kumar Jain? OP Sh. Atul 210028/2016 & 210029/2016 29 Kumar Jain.
In view of above discussion, Sh. A.K. Jain has proved that he got the cheques from Sh. N.K. Jain as a lawful consideration against the work done. Sh. N.K. Jain has failed to discharge the burden on him that the cheques were not given for a lawful consideration. This issue is decided in favour of Sh. A.K. Jain.
iii) To what relief including interest, if any, the plaintiff is entitled to ?
In view of above discussion, a money decree of Rs. 25,00,000/- is hereby passed in favour of Sh. A.K.Jain and against Sh. N.K. Jain, along with interest @ 13 per cent per annum from the date of legal notice dated 03.08.2011. One time litigation cost of Rs. 1,00,000/- is also awarded in favour of plaintiff including court fee and litigation charges.
68. Suit filed by Sh. A.K. Jain is decreed and suit filed by Sh. N.K. Jain is dismissed.
69. Decree sheet be prepared accordingly.
70. File be consigned to record room.
Announced in open Court on 05.06.2023 (TWINKLE WADHWA) ADJ-04/South-East, Saket Courts, New Delhi/05.06.2023 210028/2016 & 210029/2016