Delhi District Court
Ms D N. Jewels vs Ms Zaira Diamond India Pvt. Ltd And Ors on 10 September, 2024
Date of institution: 26.11.2015
Date of judgment:10.09.2024
Final Decision: Accused no. 1 and 3 are convicted
IN THE COURT OF MS. KATYAYINI SHARMA KANDWAL: JMFC :
NI ACT-03 (CENTRAL) : TIS HAZARI COURTS : DELHI
CT Case No. 535397/16
CNR NO.DLCT02-011807-2015
M/S DN JEWELS,
4, 3rd FLOOR, 2485/8 BEADONPURA,
KAROL BAGH, NEW DELHI-110005
THROUGH ITS ATTORNEY
SH. UMANG MUKESH BHAI PATEL ............COMPLAINANT
V.
1. M/S ZAIRA DIAMOND INDIA PVT. LTD.
SCF-33, SECTOR-22D, CHANDIGARH (UT)
2. MR. MANOJ JAIN
DIRECTOR M/S ZAIRA DIAMOND INDIA PVT. LTD.
R/O H. NO. 719, 1ST FLOOR, SECTOR-40A,
CHANDIGARH-160040
ALSO AT:
M/S ZAIRA DIAMOND INDIA PVT. LTD.
OM WORLD, GROUND FLOOR,
NEAR KAMESHWAR SCHOOL,
JODHPUR CROSS ROAD, SATELITE,
AHMEDABAD-380054
3.MR. VED PARAKASH VIJAY KUMAR UPADHYAYA
DIRECTOR M/S ZAIRA DIAMOND INDIA PVT LTD.
R/O PLOT NO.57, WARD 12C,
OPP. SADHU VASWANI HIGH SCHOOL,
LILASHAH NAGAR GDM, WARD 12 C,
KUCHCHH, GANDHI DHAM-37021 (GUJARAT)
CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 1 of 32
Digitally signed
KATYAYINI by KATYAYINI
SHARMA
SHARMA KANDWAL
KANDWAL Date: 2024.09.10
17:06:50 +0530
4.MR. VINOD VERMA
C/O M/S ZAIRA DIAMOND INDIA PVT. LTD.
H. NO. 951, SECTOR-8, PANCHKULA,
HARYANA-134109.
5.MS. HARPREET KAUR ATWAL
C/O M/S ZAIRA DIAMOND INDIA PVT. LTD.
R/O B-18, HOUSE NO. 181/2, RAM GARH,
HOSHIARPUR, PUNJAB-146001.
6. MR. SANJAY GOEL
C/O M/S ZAIRA DIAMOND INDIA PVT. LTD.
R/O FLAT NO.17, JASWANT APARTMENTS,
JAMIA NAGAR, OKHLA,
NEW DELHI-110025. .............ACCUSED
COMPLAINT UNDER SECTION 138 NEGOTIABLE
INSTRUMENTS ACT, 1881
JUDGMENT
BRIEF STATEMENT OF REASONS FOR THE DECISION FACTUAL MATRIX
1. The present complaint has been filed by the complainant against the accused persons under section 138 Negotiable Instruments Act, 1881 (hereinafter "NI Act").
2. Briefly stated, the case of the complainant is:
(i) Complainant carries on the vocation of manufacturing of diamond and diamond studded jewellery;
(ii) Accused no.1 is a company duly registered under the Companies Act. At the time of presentation of the cheques pertaining to this CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 2 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:07:01 +0530 case, accused no.2 and 3 were the then directors of accused no.1 company who were actively involved in the day to day running of its business;
(iii) Accused no.4, 5 and 6 were the directors who were actively involved in day to day running of the business of the accused no.1 company alongwith accused no.2 as on the date of making purchase of various diamond articles from the complainant, including the sale involved in the transaction in question;
(iv) Accused no. 2, 4, 5 and 6 purchased various diamond articles from the complainant between the period of 23rd September, 2014 to 28th March, 2015 on various dates upon which sales invoices with the billing address of Chandigarh for a total sum of Rs.1,16,46,895.67 were raised against accused no. 1 company against which it remitted a total sum of Rs.52,07,146/- leaving behind a debit balance of Rs.64,39,749.67/- and against sales invoices with the billing address of Delhi for a total sum of Rs.1,49,13,333.11/-, the accused remitted a total sum of Rs.80,70,000/- leaving behind a debit balance of Rs.68,43,33.11;
(v) Accused no.1 owed a total sum of Rs.1,32,83,082.78/- to the complainant;
(vi) Accused no.2 in order to pay the outstanding balance, issued seven cheques drawn on the account of accused no.1 company with ICICI Bank, Ludhiana Branch, Punjab. However, upon request of accused no. 2, the seven cheques were returned and replaced by fresh cheques which are as follows:
S.No. Cheque No. Date Amount
1. 008412 05.08.2015 15,00,000/-
CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 3 of 32
Digitally signed
KATYAYINI by KATYAYINI
SHARMA
SHARMA KANDWAL
KANDWAL Date: 2024.09.10
17:07:11 +0530
2. 008413 15.08.2015 15,00,000/-
3. 008414 05.09.2015 20,00,000/-
4. 008415 15.09.2015 20,00,000/-
5. 008416 20.09.2015 20,00,000/-
6. 008417 05.09.2015 20,00,000/-
7. 008418 25.08.2015 20,00,000/-
(vii) Time and again, accused requested the complainant to not present the cheques for encashment and in September 2015, the cheques were presented by the complainant upon instructions of accused no. 2 and 3;
(viii) The present case pertains to cheque bearing number 008415 dated 15.09.2015 for a sum of Rs.20,00,000/-, cheque bearing number 008416 dated 20.09.2015 for a sum of Rs.20,00,000/- and cheque bearing number 008417 dated 25.09.2015 for a sum of Rs.20,00,000/-, all drawn on ICICI bank, Sec-17B, Chandigarh Branch in favour of the complainant (hereinafter "cheques in question");
(ix) At the time of issuance of the cheques in question, the accused had assured the complainant that the same would be honoured on presentation;
(x) The cheques in question were presented for encashment by the complainant and the same were returned unpaid with the remarks "funds insufficient" vide returning memos dated 30.09.2015, as accused no. 2 and 3 failed to maintain sufficient balance in the bank account;
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(xi) The fact of dishonour of the cheques in question was brought to the notice of the accused but they failed to make payment of cheques in question to the complainant;
(xii) The complainant sent a legal notice dated 15.10.2015 to the accused through their lawyer demanding the payment as per the dishonoured cheques;
(xiii) The accused failed to pay the cheque amount within the prescribed period. Hence, the present complaint under section 138 of NI Act has been filed by the complainant.
3. In order to support his case, the authorized representative (AR) of the complainant was examined as CW-1 and tendered his affidavit as Ex. CW 1/X into evidence wherein averments made in the complaint were reiterated. The complainant also placed reliance on the following documents:
Ex. CW1/A (OSR) Power of attorney executed in favour of the AR of complainant Ex. CW 1/1 (Colly) Retail invoices for purchases by (OSR) accused no. 2,4,5 and 6 from the complainant between 23.09.2014 to 28.03.2015 Ex. CW 1/2 (OSR) Statement of account of purchases and payment made by accused no. 1 for its Delhi Branch Ex. CW 1/3 (OSR) Statement of account of purchases and payment made by accused no. 1 for its Chandigarh Branch Ex. CW 1/4 Cheque bearing no.008415 dated 15.09.2015 for sum of Rs.
20,00,000/- drawn on ICICI Bank Ex. CW 1/5 Cheque bearing no.008416 dated 20.09.2015 for sum of Rs.
CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 5 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date: 2024.09.10 17:07:55 +0530 20,00,000/- drawn on ICICI Bank Ex. CW 1/6 Cheque bearing no.008417 dated 25.09.2015 for sum of Rs. 20,00,000/- drawn on ICICI Bank Ex. CW 1/7 to Ex. Return memos dated 30.09.2015 CW 1/9 Ex. CW 1/10 Legal notice dated 15.10.2015 sent by complainant to the accused persons Ex. CW 1/11 (colly) Postal receipts Ex. CW 1/12 (colly) Returned envelopes Ex. CW 1/13 (colly) PODs Ex. CW 1/14 Legal notice dated 05.10.2015 sent to accused no. 2 at another address Ex. CW 1/15 Postal receipt of legal notice Ex. CW1/14 along with POD Ex. CW1/D1 Partnership deed of the complainant firm dated 16.09.2016 Ex. CW1/D2 Balance sheet of complainant firm for the year 2014-15 Ex. CW1/D3 Balance sheet of complainant firm for the year 2015-16
4. Upon service of summons, appearance was entered on behalf of accused persons. Proceedings qua accused no. 4,5 and 6 were dropped by the complainant on 18.07.2017 and separate statement of Ld. Counsel for complainant recorded on 10.07.2023 to this effect, is on record. Accused no. 2 was appointed as authorized representative (AR) on behalf of accused no.1 company and authority letter issued in his favour was brought on record on 01.08.2018. Notice of accusation under Section 251, Code of Criminal Procedure, 1973 (hereinafter referred to as "CrPC") was served upon accused no.1, 2 and 3 on 01.08.2018 to which they pleaded not guilty and claimed CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 6 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL Date:
KANDWAL 2024.09.10
17:08:03 +0530
trial. Their plea of defence was accordingly recorded. It was stated by accused no. 2 on behalf of accused no. 1 company as well as himself that:
"We had long time business dealings with the complainant. As soon as the goods were received from the complainant, we used to issue security cheques immediately at the time of receiving the goods of the amount of the said goods. Thereafter, we used to get the quality of the diamond / goods received from the complainant verified for certification and if the goods were found defective then we used to return the goods. At one point of time, Rs.1,30,00,000/- was due to the complainant as per the accounts of the complainant but we had already returned jewellery worth Rs.1,42,00,000/-. Thereafter, our business suffered losses and our business dealings with the complainant stopped. The complainant threatened us that will have to encash the security cheques and for the same, they were ready to give us goods worth the cheque amount. The goods worth the cheque amount we did not receive from the complainant as we suffered losses. Later I came to know that complainant has filed cases in respect of security cheque in question."
5. The plea of defence taken by accused no.3 was as follows:
"I do not know about any transaction between the complainant and the accused no. 1 company. I am not even the authorised signatory of the cheque in question of accused no. 1. I came to know about this case when I received summons from the court. I am only the director of accused no. 1 company."
6. It was stated by accused no. 2 as well as accused no. 3 that they do not have any outstanding liability towards complainant. Subsequently, an application under section 145(2) NI Act was filed seeking permission to cross-examine CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 7 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:08:15 +0530 the complainant which was allowed on 08.02.2019. AR of the complainant was examined and cross-examined as CW-1. Complainant evidence was closed vide order dated 07.01.2020.
7. Statement of accused no.1 and 2 under section 313 CrPC was recorded on 29.02.2020 wherein the incriminating evidence were put to accused no. 2 on behalf of accused no. 1 company as well as himself. Accused no. 2 reiterated his defence. He further stated that:
"We used to purchase diamond jewellery from the complainant. Such purchase used to be for diamonds of different quality for which different rates used to be charged. At the time of supply, no certificate used to be given by the complainant for the standard or the quality of the diamond articles purchased. At the time when the complainant used to come for delivery of the purchased diamond articles, there and then a blank signed security cheque used to be given. Blank signed cheques used to be given since the complainant used to not have sufficient time which was used to be required on our end for verification of the diamond articles purchased. Previously also such dealings and cheque transactions going on between us and the complainant since about three years. There is a laboratory in Delhi by the name of IGI at which the diamond articles used to be verified for the quality/standard/certification purpose/pricing. The diamond articles pertaining to the present case, upon verification from such lab for work found to be of lesser value. Such diamond articles of Rs.1.5 crore approximately which was found to be a lesser value was returned to the complainant. The same was also apprised on phone. However for the same, credit notes were not sent to us by the complainant and it was instead told to us that CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 8 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:08:25 +0530 diamond articles which were returned shall be duly replaced of proper value within 15 days. Despite the same such jewellery was not given by the complainant. Moreover, we had also requested the complainant not to present the cheques in question for encashment. However, the complainant did exactly that and misused the cheque in question. Moreover, diamond jewellery worth of Rs.1.3 crore was received from the complainant against which diamond jewellery worth Rs. 1.5 crore has already been returned back to the complainant and hence no liability remains to be paid. The address i.e. mentioned in the legal notice as H. No. 719, first floor, Sector 40A, Chandigarh-xx was already left by me in 2009 and I had shifted to a new address, 2158, Sector-35C, Chandigarh and hence the complainant knew about the same since their officials had visited such new residential address of mine subsequently also. In a similar manner, previously my shop was at Sector 22 in Chandigarh which was subsequently shifted to Sector-35. The last delivery of the diamond articles was made at such new address of the shop. The last 7 cheques were handed over to the complainant at the said new address of my shop only. The complainant therefore was completely aware of the new address of the shop as well as my residence and despite the same legal notice was sent on the old addresses."
8. Statement of accused no.3 under section 313 CrPC was recorded on
30.09.2021 wherein the incriminating evidence were put to him and he reiterated his defence that he does not have any knowledge regarding the transactions in question and was not a director in accused no. 1 company on the date when transactions in question took place between the complainant and accused no.1 company.
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9. Accused no. 1 company was being represented by accused no. 2 during the trial till his passing away after recording of statement under section 313 CrPC. Proceedings were subsequently abated qua accused no. 2. Thereafter, no authorized representative was appointed by accused no.1 company despite issuance of court notice and therefore, the matter was proceeded under section 305(4) of CrPC as from the perusal of record it is evident that accused no. 1 company had due knowledge regarding the proceedings. Accused no. 3 led defence evidence as DW-1 and the matter was listed for final arguments wherein arguments were advanced only on behalf of complainant and accused no. 3.
10. During the course of arguments, Ms. Savita Malhotra and Mr. Suman Malhotra, Ld. Counsel for complainant argued that all the ingredients of section 138 NI Act have been fulfilled in the present case and that the complainant has duly proved his case against accused no. 1 and 3. It was further argued that accused no. 1 and 3 have failed to rebut the presumption that is drawn against them and that the plea of defence raised by the accused is untenable. It was urged that accused no. 2, on behalf of accused no. 1 company, has duly accepted the fact that he issued the cheque in question which fastens the liability upon accused no. 3 being vicariously responsible for acts of accused no. 1 company. It was argued that presumption under section 118(a) read with section 139 of the NI Act is raised in favour of the complainant which accused no. 1 and 3 have failed to rebut.
11. Per contra, Mr. Sujit Gupta, Ld. Counsel for accused no. 3 argued:
(i) that accused no. 3 has maintained a consistent defence that he was not involved in day-to-day affairs of accused no. 1 company, transaction in question and that the complainant has failed to prove CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 10 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:08:44 +0530 the involvement of accused no. 3 beyond reasonable doubt and hence, the accused be acquitted;
(ii) that the cheques in question, which do not bear signatures of accused no. 3, were not issued by him as he was not a director or authorized signatory in accused no. 1 company at the time of transaction in question;
(iii) that there are no specific allegations or averments made against accused no. 3 in the complaint pertaining to the alleged transaction in question and issuance of invoices thereof;
(iv) that only accused number 2, 4, 5 and 6 were responsible for day-to-
day affairs and management of accused no. 1 company which has been admitted by the complainant in its complaint. Accused no. 3 was an investor who had invested approximately Rs. 92 lakhs in accused no. 1 company and had only become a director in the company to have an insight in its business;
(v) that accused no. 3 had resigned from the directorship of accused no.
1 company on 07.03.2017 after observing that accused no. 1 company is facing huge losses and since the transaction in question was entered into by accused no. 1 company through accused no. 2, 4, 5 and 6, there is no liability of accused no. 3 towards the complainant company qua transaction in question;
(vi) that since, accused no. 3 was not present in meetings between accused no.1 company and the complainant qua transactions in question and the invoices were also not raised towards accused no.3, it is clear that accused no. 3 has been impleaded by the complainant with malafide intention and the directors who are present in the meeting and entered into the transactions, were CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 11 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:08:53 +0530 dropped by the complainant since they were aware that they would not be able to recover any amounts from them.
(vii) that from the testimony of the AR of complainant, it is clear that neither was accused no. 3 responsible for the transaction in question nor were the cheques in question issued by accused no. 3 and therefore, it is clear that accused no. 3 had no role to play in the transactions in question. In support of his arguments, ld. Counsel placed reliance on Siby Thomas v. Somany Ceramics Limited (2024) 1 SCC 348; Pooja Ravinder Devidasani v. State of Maharashtra and Anr. (2014) 16 SCC 1; Ashoke Mal Bafna v.
Upper India Steel Manufacturing and Engineering Company Limited (2018) 14 SCC 202; Susela Padmavathy Amma v. Bharti Airtel Limited 2024 SCC OnLine SC 311; Alka Khandu Avhad v. Amar Symaprasad Mishra & Anr. (2021) 4 SCC 675; National Small Industries Corporation Limited v. Harmeet Singh Paintal (2010) 3 SCC 330; SMS Pharmaceuticals v. Neeta Bhalla and Anr (2005) 8 SCC 89 and Saroj Kumar Poddar v. State (NCT of Delhi) (2007) 3 SCC 693.
THE LAW APPLICABLE
12. Before delving into the facts of the case, it is apposite to bear in mind the law with respect to section 138, NI Act. In order to prove his case under section 138 NI Act, the complainant must prove the following facts-
(i) The accused issued a cheque on a bank account maintained by him;
(ii) The said cheque must have been issued, wholly or partly, in discharge of a 'legal debt or other liability';
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(iii) The said cheque was presented before the bank within 3 months from the date of issuance and was dishonoured;
(iv) The payee issued a legal demand notice, within 30 days of receipt of information of dishonour of the cheque;
(v) The drawer failed to make payment within 15 days of receipt of the said legal demand notice It is only when all the above-mentioned ingredients are satisfied that the person who has drawn the cheque can be set to have committed an offence u/s 138 NI Act.
13. Further, the NI Act raises two important legal presumptions in favour of the holder of the cheque as soon as the execution of cheque is proved. As per Section 118(a) NI Act, it shall be presumed that every negotiable instrument was 'made, accepted, transferred, negotiated or endorsed for consideration, unless the contrary is proved'. Furthermore, as per section 139 NI Act, it shall be presumed that 'the holder of cheque, received the cheque for the discharge, in whole or in part, of any debt or other liability, unless the contrary is proved.'
14. The Hon'ble Supreme Court of India in Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : 2019 SCC OnLine SC 491 held as follows:
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 13 of 32 Digitally signed by KATYAYINI
KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
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(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
ANALYSIS/REASONING
15. In order to prove his case, the complainant has to prove the ingredients of offence under section 138 NI Act as mentioned in paragraph 12 and analysed below. Proceedings qua accused no.4, 5 and 6 were dropped by the complainant during the course of trial and proceedings were abated qua accused no. 2 vide order dated 04.08.2023. Therefore, the complainant has to prove its case against accused no. 1 company and accused no.3 only.
Ingredient 1: Accused issued a cheque on a bank account maintained by him and Ingredient 3: the said cheque was presented before the bank within 3 months from the date of issuance and was dishonoured
16. At the very outset, it is pertinent to note that in the present matter the cheques in question i.e. Ex. CW1/4, Ex. CW 1/5 and Ex. CW 1/6 were issued on account maintained by accused no. 1 company in favour of the complainant firm on 05.08.2015, 15.08.2015 and 25.09.2015 respectively. Accused no. 2 has admitted his signatures over the cheques in question and accused no. 3, CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 14 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:09:25 +0530 vide order dated 26.11.2015, has been summoned by the Court to face this trial being vicariously liable for the acts of accused no.1 company. The cheques were dishonored vide return memos Ex. CW1/7, Ex. CW 1/8 and Ex. CW 1/9 dated 30.09.2015 with the reason 'funds insufficient'. Therefore, ingredient (i) and (iii) stand proved.
Ingredient 4: Complainant issued a legal demand notice, within 30 days of receipt of information of dishonour of the cheque
17. Legal notice Ex. CW1/10) dated 15.10.2015 was sent by the complainant on 19.10.2015 to all accused and on 29.10.2015 to accused no. 2, as proved by postal receipts Ex. CW 1/11(Colly) and Ex. CW1/15. Therefore, ingredient of offence mentioned in point (iv) stands proved.
Ingredient 5: The accused failed to make payment within 15 days of receipt of the said legal demand notice.
18. As regards this ingredient, the complainant has to prove receipt of legal demand notice by accused and non-payment by the complainant 15 days after receipt of the notice. Accused no. 3, in his notice framed under section 251 CrPC denied receipt of legal demand notice but admitted it in his statement recorded under section 313 CrPC as well as at the time of his cross- examination. No payment was thereafter made to the complainant firm. Hence, ingredient as mentioned in point (v) stands proved qua accused no. 3. As far as accused no. 1 company is concerned, accused no. 2 stated that they did not receive the legal demand notice and that despite complainant being aware that the company had shifted from the address as mentioned on the CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 15 of 32 Digitally signed KATYAYINI by KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date: 2024.09.10 17:09:34 +0530 demand notice, it was not sent to the correct address. However, no independent evidence to prove any of the above statements was led on behalf of accused no. 1 company, which could have placed on record official documents to prove their change of address. Moreover, perusal of record shows that summons were issued to accused persons vide order dated 26.11.2015 and on the next date of hearing i.e. 04.03.2016, accused no.1, 2 and 3 had entered appearance through their counsel. Without any independent evidence being led to prove that accused no. 1 was not carrying business out of the address upon which the legal demand notice was issued, no benefit of the given statement can be afforded to it specially keeping in consideration that the Hon'ble Supreme Court of India in C.C. Alavi Haji v. Palapetty Muhammed, (2007) 3 SCC (Cri) 236 held as follows:
"A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the GC Act and Section 114 of the Evidence Act."
19. Therefore, in the absence of evidence to the contrary, this Court shall presume that the legal demand notice had been duly served upon accused no. 1 company as well and ingredient as mentioned in point (v) stands proved qua accused no. 1 company as well. The present matter was instituted by the complainant on 17.11.2015. Therefore, ingredient 1, 3, 4 and 5 stand prove qua accused no. 1 as well as accused no. 3. Now what is to be examined is if ingredient 2 stands proved qua both accused?
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Ingredient 2: The cheques must have been issued, wholly or partly, in discharge of a 'legal debt or other liability'
20. The case of the complainant is that the accused purchased several jewellery articles from them and issued the cheques in question for part-discharge of their outstanding liability, which subsequently got dishonored. During the course of trial, accused no. 2 has admitted his signatures over the cheque in question and as discussed previously, the legal presumption u/s 118 (a) /139 of the NI Act are attracted to the present case. Accused no. 3 has been summoned by the Court to face this trial being vicariously liable for the acts of accused no.1 company and therefore, even accused no. 3 has the burden to rebut the presumptions arising in favour of the complainant and against accused no. 1 company.
21. Once Section 139 of the NI Act comes into picture, the Court presumes that the cheque was issued in discharge, in whole or in part, of any debt or liability. The effect of the presumption has been explained in a catena of judgments, including the decisions in, Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16 and RohitbhaiJivanlal Patel v. State of Gujarat &Anr (2019) 18 SCC 106. At this stage, with the help of presumption under Section 139 of the NI Act, the case of the complainant stands proved and ingredient 2 also stands proved.
22. It has been held time and again that the said presumption is a rebuttable one and its only effect is to shift the initial burden of proof on the accused. When the presumption is raised in favor of the complainant, the burden shifts upon the accused to disprove the case of the complainant by rebutting the presumption raised in favour of the complainant. It is well settled that in order to rebut the presumption and shift back the burden of proof on the CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 17 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA KANDWAL SHARMA Date:
KANDWAL 2024.09.10 17:09:52 +0530 complainant, the accused is only required to raise a probable defence and he cannot be expected to discharge an unduly high standard of proof. Therefore, the standard of proof for rebutting the presumption under Section 139 NI Act is "preponderance of probabilities".
23. The accused has to make out a fairly plausible defence which is acceptable to the Court. The accused can do the same, either by leading direct evidence in his defence or by raising doubt on the material/evidence brought on record by the complainant. As held by Hon'ble Apex Court in Kumar Exports v. Sharma Carpets (2009)2 SCC 513:
"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 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 CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 18 of 32 Digitally signed KATYAYINI by KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date: 2024.09.10 17:10:01 +0530 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."
(emphasis supplied)
24. To sum up the above mentioned judgment, 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. However, at the same time, it is also to be remembered that mere denial of the existence of legally enforceable debt or other liability cannot be said to be sufficient to rebut the presumption and something which is probable has to be brought on record to shift the burden back to the complainant. Keeping these basic principles in mind, this Court shall now proceed to deal with the defence taken by the accused and examine whether the accused has been able to rebut the presumption arising in favour of the complainant.
LIABILITY OF ACCUSED NO. 1 COMPANY
25. Arguments have not been advanced on behalf of accused no. 1 company, which has also not led any defence evidence. Therefore, for determination of liability of accused no. 1 company, this Court shall take into consideration the material on record and arguments advanced on behalf of complainant.
CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 19 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date: 2024.09.10 17:10:10 +0530
26. At the stage of framing of notice under section 251 CrPC, it was stated by accused no. 2, on behalf of accused no. 1 company, that there were long standing business dealings between accused no. 1 company and the complainant firm. It was also stated that security cheques were issued to the complainant as soon as goods were received from them, which were then sent for verification of quality of diamonds/goods and if found defective, they were returned to the complainant. It was further stated that at one point Rs. 1,30,00,000/- were due from the accused no.1 company to the complainant as per the accounts of the complainant, but that jewellery worth Rs. 1,42,00,000/- had already been returned, and since the business of accused no. 1 company suffered losses, the business dealings with the complainant stopped. Thereafter, the complainant threatened accused no. 1 company to encash the security cheques and they were willing to supply goods worth the cheque amount which were not received from the complainant who has misused the security cheques including the cheques in question.
27. The defence was reiterated in his statement recorded under section 313 CrPC. It was further stated that the diamond articles pertaining to the present case were found to be of lesser value and were returned to the complainant who assured that they would replace the diamond articles within 15 days, but that the jewellery was not given by the complainant and credit notes were also not issued. It is pertinent to note that accused no. 2 in his statement recorded under section 313 CrPC admitted all facts regarding the invoices and ledger placed on record by the complainant.
28. The defence taken by accused no. 2 on behalf of accused no. 1 does not inspire the confidence of the court for the following reasons:
(i) It is stated in his statement recorded under section 313 CrPC that they had received defective goods from the complainant and despite CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 20 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:10:20 +0530 assurance neither was the jewellery replaced nor were credit notes issued. Firstly, accused no. 2 has admitted the invoices and ledger placed on record which shows that goods against invoices were indeed supplied by complainant to accused no. 1 company. Secondly, no independent evidence has been brought on record to prove that the goods were defective. No report/authentication document/certificate issued by any expert to this effect has been placed on record. Thirdly, the defence of accused no. 1 company when tested on the pedestal of a reasonable man fails to pass the test. A reasonable man whose security cheques are in the possession of another against certain goods which turn out to be defective upon their authentication, would, after realising that defective goods have been received by him, request for return of goods as well as return of the cheques. If oral request is not heeded to, a reasonable man would issue notice for return/replacement of goods or in the alternative, for return of its security cheques and ultimately lodge a complaint if no response is still received from the other person. However, no evidence to this effect has been brought on record. Mere statement that the goods were defective and security cheques have been misused is not sufficient;
(ii) At the stage of cross-examination of the AR of complainant, no questions have been asked regarding the defect in goods supplied by the complainant. In fact, the entire cross-examination does not even contain a suggestion to this effect. Furthermore, no questions have been put forth to the AR of complainant regarding subsequent return of goods, non-issuance of credit notes or non-supply of undamaged goods by the complainant firm after return of initial damaged goods.CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 21 of 32 Digitally signed
KATYAYINI by KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date: 2024.09.10 17:10:28 +0530 In fact, one of the suggestions given to the AR of complainant during his cross-examinations is as follows:
"It is wrong to suggest that I used to accept the payment in cash for the goods sold by me on behalf of the complainant firm to the accused"
From the aforementioned suggestion, it is not clear if the defence of accused no.1 company is that cash payment had been received by the complainant firm or the stances taken by accused no. 2, on behalf of accused no. 1 company which are prima facie contradictory. At one place, according to the suggestion as reiterated above, the payment has been made to the complainant firm in cash while accused no. 2, in his notice as well statement under section 313 CrPC, has stated that security cheques have been misused by the complainant who did not replace the damages/defective goods, did not issue credit notes and did not return the security cheques. Moreover, no proof of alleged cash payments made to complainant firm has ever been brought on record to dispute that the cheques in question do not reflect the correct outstanding liability of accused no.1 company. It is logical that a company which has made payment for certain goods in cash is expected to take steps for return of security cheques taken for the same transaction, to itself but nothing to prove this has come on record. Further, if goods supplied against any cash payment turned out to be defective, why were no steps taken by the accused company thereafter remains unexplained.
(iii) Certain questions have been put to the AR of complainant regarding delivery and acknowledgment of delivery of goods delivered to accused no. 1 company, in reply of which following statements have CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 22 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:10:36 +0530 been made by him: "In so far as proof of delivery is concerned, there is acknowledgment of receipt of goods on the invoices attached in the complaint.", "All invoices bear the signature of acknowledgment and receipt of goods." and "I used to deliver goods personally to the accused no.2 at Delhi and Chandigarh office respectively." From the aforesaid statements, it is clear that the AR of complainant maintains the stance that the invoices placed on record bear acknowledgement of receipt of goods as well as signatures to prove the same. He also stated that he used to personally deliver the goods to the Delhi and Chandigarh office of accused no. 1 company. However, nothing has been brought on record to dispute any of the aforementioned facts. Infact, not even a suggestion has been given to the AR of complainant to say that the statements of AR of complainant are false and frivolous or that no goods were delivered or that defective goods were delivered. It is pertinent to note that each invoice in Ex. CW1/1(Colly) contains a stamp of Zaira Diamond (India) Pvt. Ltd. as well as signatures of its authorized signatory which has not been disputed at any stage during the trial.
(iv) Another defence by accused no. 2 on behalf of himself and accused no. 1 company was that while billing of certain goods was done by the complainant in favour of accused no. 1 company, those goods were supplied to the retailers and hence, the company never received the goods as billed. As per section 103 of the Indian Evidence Act, 1872, the burden of proving a fact is upon the person who wishes the Court to believe in its existence/non-existence. Therefore, the burden of proving the facts as alleged by accused is upon them. In the circumstances as narrated by accused no. 2, a reasonable man CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 23 of 32 Digitally signed KATYAYINI by KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date: 2024.09.10 17:10:51 +0530 would have taken steps like issuance of notice/lodging a complaint if wrongful billing had been done in their name and material was never supplied. The very least that is expected in such circumstances is to send a letter/email/communication to the effect as aforementioned. However, nothing has been brought on record to show that any of these steps were taken by the accused which makes it very difficult for the court to believe in existence of any such circumstances.
29. Hence, it is clear that the statements given by accused no. 2, on behalf of accused no. 1 company do not corroborate with the steps taken on behalf of the company. Moreover, the glaring inconsistencies in the case of accused no.1 company make it extremely difficult for the court to believe in it. Since, no evidence has come on record to rebut the presumption in favour of complainant, accused no. 1 company is held liable to have committed an offence under section 138 NI Act.
LIABILITY OF ACCUSED NO. 330. For the aforementioned reasons, this Court is of the opinion that the complainant has been able to prove its case against accused no. 1 company. What is to be examined next is whether accused no. 3 can be held vicariously liable for the acts of accused no. 1 company by application of section 141 of the NI Act. It is pertinent to reproduce section 141 of the NI Act here which reads as follows:
(1) If the person committing an offence under section 138 is a company, 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 CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 24 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:11:01 +0530 of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:
Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.
(2)Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purposes of this section,--
(a)"company" means any body corporate and includes a firm or other association of individuals; and
(b)"director", in relation to a firm, means a partner in the firm.
31. Therefore, from the language of the section, it is clear that any person who is in charge of and responsible to the company for the conduct of business of CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 25 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:11:12 +0530 the company as well as the company shall be deemed to have committed an offence under section 138 of the NI Act. Therefore, in order to show that a director is not liable for the acts of the company, such director may prove:
(i) That he was not incharge of and responsible to the company for the conduct of its business;
(ii) The offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
32. The main defence of accused no.3 is that he is not vicariously responsible for the acts and omissions on part of accused no. 1 company as he was not involved in its day to day affairs. Reliance was placed by Ld. Counsel on various case laws to state that since only such director can be held vicariously liable for the acts of a company who was involved in its day to day affairs and that there should be specific averments in the complaint regarding the role of such director, accused no. 3 cannot be held liable. In Susela Padmavathy Amma (supra), Hon'ble Apex Court after considering the judgments and ratios as laid down SMS Pharmaceuticals (supra), Ashoke Mal Bafna (supra) and Pooja Ravinder Devidasani (supra), held that it is a settled position of law that in cases of dishonour of cheques where the offence has been committed primarily by a company, there must be essential averments made in the complaint with respect to the persons who are at the time of commission of offence, responsible for the conduct of business of the company. It has been held that merely the designation of a director, unless such director is the managing director or joint managing director of the company or the signatory of cheque in question, would not make a person liable under section 138 read with section 141 of the NI Act and any director CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 26 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:11:21 +0530 who was not in charge of and was not responsible for the conduct of business of the company at the relevant will not be liable for the aforesaid offence.
33. Similar views have also been taken by the Hon'ble Apex Court in Saroj Kumar Poddar (supra), National Small Industries Corporation Limited (supra) and Siby Thomas (supra). Therefore, what has to be examined in the present case is whether the complainant has made specific averments regarding the role of accused no. 3 in commission of offence under section 138 NI Act committed by accused no. 1 company and whether, from the material on record, the court can come to a conclusion that accused no. 3 was involved in day-to-day affairs of accused no. 1 company.
34. Ld. Counsel for accused no. 3 has also placed reliance on Alka Khandu Avhad (supra) in support of his arguments. However, the facts of the given case are not applicable to the present case as in Alka Khandu Avhad , the cheque in question was drawn on personal account of one of the accused and section 141 of the NI Act had no applicability therein.
35. In Dilip Hariramani v. Bank of Baroda 2022 SCC OnLine SC 579, the Hon'ble Supreme court of India placed reliance on the summarisation of law on Section 141 by Hon'ble Apex Court in National Small Industries Corporation Limited (supra) to the following effect :
"39. From the above discussion, the following principles emerge:
(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction.
(ii) Section 141 does not make all the Directors liable for the offence.
The criminal liability can be fastened only on those who, at the CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 27 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:11:31 +0530 time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company.
(iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.
(iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred.
xx xx xx
(vii) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases."
(emphasis supplied)
36. From the part as reproduced above, it is clear that the burden was on the complainant to show that the person prosecuted, in the present case accused no.3, was in charge of and responsible to accused no.1 company for conduct of its business. Perusal of cross-examination of AR of complainant, following admissions/statements have been made by him which are also relevant for determination of liability of accused no.3:
(i) "The signatures towards the acknowledgment of goods on the invoices are of accused no.2."CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 28 of 32 Digitally signed
KATYAYINI by KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date: 2024.09.10 17:11:41 +0530
(ii) "I used to deliver goods personally to the accused no.2 at Delhi and Chandigarh office respectively."
(iii) "At the time of transaction I was aware of only one director of accused no.1 i.e. accused no.2."
(iv) "I had no communication with accused no.3 Ved Prakash Vijay Kumar Upadhayay while I was selling the goods to accused no.1."
(v) "For presentation of cheques, I had a word with accused no.2 and partner of my firm namely Vimal Bhai, had a talk with accused no.3 Ved Prakash Vijay Kumar Upadhyay."
(vi) "At the time of sale / purchase, I did not meet the accused no.3 but I have met him thereafter"
(vii) "There is no written communication between the complainant firm and the accused on the first return of the cheque. It was an oral communication between me and the partner of the complainant firm with the accused no.2 & 3 upon which the cheques were represented"
(viii) "It is wrong to suggest that there had been no oral communication between me and accused no.2 and partner of the complainant firm and accused no.3 for presentation of the cheques before the same were actually presented."
37. Without disputing the ratio of the cases relied upon by Ld. Counsel for accused no. 3, this Court is of the view that the complainant has been able to sufficiently prove that accused no. 3 was in charge of and responsible to accused no. 1 company for conduct of its business for the following reasons. It is correct that the AR of complainant has admitted that when the transactions in question took place, he was only aware of existence of one director of accused no. 1 company i.e. accused no.2. However, it is a settled CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 29 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:11:49 +0530 position of law that application of section 141 of NI act upon a director is determined on the basis of his role in the company at the time when the offence was committed. The cause of action for an offence under section 138 NI Act arises 15 days after the legal notice demanding payment of the cheque amount is delivered to the accused. It is not disputed by either of the parties that accused no. 3 was the director at the time when legal demand notice was served upon accused no. 1 company and accused no.3 and subsequent payment was not made by accused no.1 company. Therefore, whether or not, accused no. 3 was a director at the time whether the transaction took place is irrelevant as long as the complainant is able to prove that he was a director who was in charge of and responsible for conduct of the company, at the time of commission of offence under section 138 NI Act. Hence, the defence that he was not a director at the time when transactions in question took place or that the transactions in question did not take place on his presence or that the invoices were not raised in his presence or that the cheques were not handed over by him to the complainant, will not absolve accused no. 3 of his liability if his role in the company at the time of commission of offence is clearly established.
38. It has been stated on behalf of accused no. 3 that he was never involved in day affairs of accused no. 1 company and that the complaint does not contain any specific averments regarding his involvement in the transactions in question. However, from the cross examination of AR of complainant, it is clear that he has maintained the position that the cheques in question were presented as per the instructions received from accused no.2 and accused no.3. He has specifically stated that for presentation of the cheques in question, he had spoken with accused no.2 and one Mr. Vimal who was partner in the complainant firm had spoken with accused no.3. Similar CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 30 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:12:09 +0530 averment has also been made by the complainant in the complaint and that is all that is required from the complainant. The complainant has made specific averment regarding the role of accused no. 3 in commission of the offence under consideration in the present case. Ld. Counsel for complainant had also argued that accused no. 3, during his cross-examination, has admitted that he had signed on one balance sheet of accused no.1 company. Perusal of testimony of accused no.3 shows that the suggestion as recorded therein is "It is correct to suggest that I have one balance sheet of accused no. 1 company". Upon enquiry at the stage of final arguments, both parties have admitted that one balance sheet of accused no.1 company had been signed by accused no. 3 and that the omission is inadvertent. Thus, the word "signed" has been inadvertently omitted at the time of recording of evidence of the accused and the suggestion should have been recorded as "It is correct to suggest that I have signed one balance sheet of accused no. 1 company" and is being read accordingly. The aforementioned fact prima facie shows that accused no.3 was actively involved in the financial affairs of accused no.1 company and was accordingly, aware of its assets and liabilities. Apart from a general suggestion to the AR of complainant that no oral communication regarding the presentation of cheques in question was made between the parties, nothing has been brought on record by accused no.3 to prove his argument. For instance, independent evidence in the form of testimonies of officials of accused no. 1 company could have been brought on record by accused no.3 to prove his defence. However, no such exercise was undertaken at any stage of the trial. Mere denial that the accused was not involved in the affairs of the company is not sufficient when the complaint clearly contains averment clearly highlighting the role of accused no. 3 in the offence and admission by accused no. 3 at the stage of final arguments as well as in his testimony that CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 31 of 32 Digitally signed by KATYAYINI KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:
2024.09.10 17:12:20 +0530 balance sheet of the accused no. 1 company had been signed by him on one occasion.
39. As held in Rohitbhai Jivanlal Patel (supra), merely by denial or merely by creation of doubt, the accused cannot be said to have rebutted the presumption as envisaged under section 139 of the NI Act.
40. Accordingly, this Court is of the view that the complainant has successfully proved commission of offence punishable under section 138 of the NI Act by accused no. 1 and accused no.3.
41. Accordingly, accused no.1 company namely Zaira Diamond India Pvt. Ltd. is held guilty for committing the offence punishable under section 138 NI Act. By application of section 141 of NI Act, accused no. 3 Mr. Ved Prakash Vijay Kumar Upadhyaya is also held guilty of committing offence under section 138 NI Act.
42. Accused no. 1 and 3 are hereby convicted for the offence under section 138 NI Act. Proceedings qua accused no. 2 stand abated vide order dated 04.08.2023 and proceedings qua accused no. 4, 5 and 6 have been withdrawn by complainant with effect from 18.07.2017.
43. Let the convict be heard on the point of sentence separately.
44. A copy of this judgment be placed on the official website of the District Courts.
Digitally signed KATYAYINI by KATYAYINI
SHARMA
SHARMA KANDWAL
KANDWAL Date: 2024.09.10
17:12:32 +0530
ANNOUNCED IN OPEN COURT KATYAYINI SHARMA KANDWAL
ON 10.09.2024 JMFC-03(NI ACT), CENTRAL
THC, DELHI/10.09.2024
(THIS JUDGMENT CONTAINS 32 PAGES AND EACH PAGE IS DIGITALLY SIGNED BY ME) CC No. 535397/ 2016 D N Jewels v. Zaira Diamond India Pvt. Ltd. and Ors. Page 32 of 32