Delhi District Court
Cc Ni Act No.7888Of 2021 M/S Cico ... vs . Six Season Concertex Pvt. Ltd. Page No. ... on 16 December, 2022
CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 1
IN THE COURT OF MS. AISHWARYA SHARMA,
METROPOLITAN MAGISTRATE (NI ACT) DIGITAL COURT02,
SOUTHEAST DISTRICT, SAKET COURT COMPLEX, NEW DELHI
Criminal Complaint No: CC NI ACT/7888/2021
M/S CICO TECHNOLOGIES LTD. ...Complainant
Versus
M/S. SIX SEASONCONCRETEX PVT. LTD. ... Accused
1. Name & address of the complainant: M/S CICO TECHNOLOGIES
LTD.
THROUGH ITS AUTHORISED
REPRESENTATIVE MR.
SANDEEP CHATTERJEE
having office at C120, 2nd Floor,
Okhla Industrial Area, Phase I,
New Delhi110020.
2. Name & address of the accused : 1) M/S SIX SEASON
CONCRETEX PVT. LTD.
Having Office at A/P90/B, Sector
B, South Cannal Road,
Metropolitan Societies Pvt. Ltd.,
Kolkata, West Bengal
2) SH. DEVENDRA YADAV
DIRECTOR OF M/S SIX
SEASON CONCRETEX PVT.
LTD. having Office at A/P90/B,
Sector B, South Cannal Road,
Metropolitan Societies Pvt. Ltd.,
Kolkata, West Bengal,.
3) SH. GOUTAM
CHAKRABORTY
DIRECTOR OF M/S SIX
SEASON CONCRETEX PVT.
Digitally signed
by AISHWARYA
AISHWARYA SHARMA
SHARMA Date:
2022.12.16
17:15:47 +0530
CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 2
LTD. Having Office at A/P90/B,
Sector B, South Cannal Road,
Metropolitan Societies Pvt. Ltd.,
Kolkata, West Bengal
3. Offence complained of : U/S 138 The Negotiable
Instruments Act,1881.
4. Plea of accused : Pleaded not guilty.
5. Final Arguments : 02.12.2022
6. Date of Institution of case : 09.10.2021
7. Date of decision of the case : 16.12.2022
JUDGMENT
1. Vide this judgment, I shall dispose of the aforementioned complaint case filed by the complainant, M/S CICO TECHNOLOGIES LTD. (hereinafter referred to as the 'complainant') through it's AR Mr. Sandeep Chatterjee, who has been authorized to pursue this complaint vide it's board of resolution dated 16.02.2021, against the accused persons namely 1) M/S SIX SEASON CONCRETEX PVT. LTD., 2) MR. DEVENDER YADAV (Director) and 3) MR. GAUTAM CHAKRABORTHY (Director) (hereinafter referred to as 'the accused persons').
2. Factual Matrix: The complainant's case is that it is a company registered under Companies Act 1956, as MSME with Ministry of Micro Small & Medium Enterprises, under the category of 'small manufacturing industry' and is engaged in the business of construction of material and also provides comprehensive range of end to end permanent solutions for industrial, architectural and General Construction and is a wellknown name in the market. It is stated that the accused company namely M/S Six Season Concertex is a private limited company and Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.12.16 17:16:34 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 3 accused No.2 Mr. Devendra Yadav and Accused NO.3 Mr. Goutam Chakraborty, both being the directors of this company i.e. M/S Six Season Concertex Pvt. Ltd. (hereinafter referred to as the 'accused persons'), are responsible for carrying out it's day to day activities and are primarily responsible for managing and controlling it's affairs and were incharge of and responsible for the conduct of accused No.1 when the offence in question was committed. It is stated that both the accused persons namely Sh. Devendra Yadav and Sh. Goutam Chakraborty approached the complainant for supply of various products manufactured by the complainant with the assurance to make payment for the same in timely manner as per the invoices raised by the complainant and relying upon their undertaking, the complainant supplied them goods vide invoice No. KOLFY2021/0284 for a sum of Rs. 2,57,004/ dated 12.03.2021 and Invoice No. KOLFY20/0008 dated 08.04.2021 for a sum of Rs.2,57,004/ However, despite receipt of goods the accused persons did not make payment against the above mentioned invoices and upon multiple requests of the complainant, accused No.1 company started making payment of outstanding amount in installments and in discharge of their outstanding liability as on 24.05.2021 of Rs. 5,14,008/, issued two cheques bearing no. 298227 dated 25.05.2021 for an amount of Rs. 2,57,004/ and cheque bearing no. 298228 dated 10.06.2021 for an amount of Rs.2,57,004/(hereinafter referred to as the cheques in question). When the complainant presented the said cheques for encashment on 28.07.2021 with it's banker, the same were dishonoured for the reasons "Funds Insufficient" vide cheque return memos dated 30.07.2021. The complainant company also requested the accused persons through telephonic as well as written communications to clear the said outstanding amount of Rs. 5,14,008/ and on 23.07.2021, the complainant also wrote an email to the accused persons and requested to clear the outstanding amount and the accused company replied to the said email of the complainant company, Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.12.16 17:16:50 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 4 through email dated 30.07.2021 admitting the outstanding amount and assured the complainant company that they will clear the outstanding amount through part payments at the earliest, but they failed to do so. Thus, the complainant company issued a legal demand notice dated 16.08.2021 through email as well as through speed post asking them to pay the cheque amount within 15 days and the notice was delivered through speed post on 23.08.2021 and through email on 16.08.2021. However, despite receipt of the said legal demand notice, the accused company did not make the payment. The accused persons had sent the reply on 23.08.2021 to this legal notice dated 16.08.2021 through email claiming that they had received the goods and they had already cleared the outstanding payment of the complainant, however, they did not clear the liability of the complainant. Hence, being aggrieved, the complainant filed the present complaint under section 138 of The Negotiable Instruments Act, 1881 on 09.10.2021 and prayed that the accused persons be summoned and punished under section 138 of The Negotiable Instruments Act, 1881 and that they be also directed to pay fine of double the cheque amount to the complainant.
3. Summoning of accused: The court summoned the accused persons after hearing the arguments at the stage of presummoning vide order dated 04.02.2022 and the accused persons entered appearance in the present case on 30.04.2022.
4. Notice: The court has framed notice of accusation under Section 251 Cr.P.C. against the accused persons on 27.05.2022. The substance of accusation was read over and explained to the accused persons and after being satisfied that the accused persons comprehended the same, the court recorded their plea.
5. Plea of the accused: The accused persons pleaded not guilty and claimed trial. The accused persons admitted that they have signed the cheques in Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.12.16 17:18:04 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 5 question. They have also admitted that the particulars of the cheques in question were filled by their staff. They have also admitted that the legal demand notice was sent at their correct address, however, they denied receiving the same. In their defence, the accused persons stated that the cheques in question were given as security for their business transactions with the complainant company as they were doing business with the complainant company for last 2 years and due to dispute about the quality of material, they did not make the payment to the complainant and the complainant has misused their security cheques. On the same date, the statement of accused persons were recorded U/S 294 Cr. P.C wherein they admitted correctness of dishonor memo, pursuant to which the Bank witnesses mentioned at Sr. No. 2 & 3 in the list of witnesses of complainant were dropped.
6. Evidence on behalf of complainant: To prove their case prima facie, the complainant company has examined it's AR Mr. Sandeep Chatterjee as CW1 who has tendered his affidavit and complaint along with certificate U/S 65 B of Indian Evidence Act EX. CW1/2 bearing his signatures at point A, B & C respectively. The complainant company has also filed and relied upon EX. CW1/1 the copy of Board Resolution 16.09.2021, EX. CW1/3 the copy of Master Data of accused no.1 company, EX.CW1/4AB the copy of form DIR12/ form 32 of accused no.1 company, EX.CW1/5AB the copy of invoices dated 12.03.2021 and 08.04.2021, EX.CW1/6 the copy of ledger maintained by complainant company pertaining to accused, EX. CW1/7AB the original cheque bearing No. 298227 dated 25.05.2021 and 298228 dated 10.06.2021, EX. CW1/8 AB the original return memos dated 30.07.2021, EX. CW1/9 the copy of email dated 30.07.2021 sent by the accused persons admitting their liability, EX.CW1/10 the legal demand notice dated 16.08.2021 along with it's postal receipts and tracking report EX. CW1/11/A B, EX.CW1/12 the email communication dated 16.08.2021 sent to the accused by Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2022.12.16 17:18:13 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 6 Ld. Counsel for complainant, EX. CW1/13 reply filed by the accused to the legal CICO demand notice of the complainant. Thereafter the complainant was subjected to cross examination.
7. During his cross examination, this witness stated that as per their invoices EX. CW1/5AB, the total outstanding towards the accused was Rs.5,14,008/ and that the net value of the goods as per the invoice EX. CW1/5A is Rs. 2,17,800/ excluding GST and the net value of the goods as per the invoice EX.
CW1/5B is Rs. 2,17,800/ excluding GST. He stated that the GST amount in the invoices Ex. CW1/5 A is Rs. 39,204/ and the GST amount in invoice EX. CW1/5B is Rs. 39,204/. He denied the suggestion that this amount of GST is not mentioned in invoices EX. CW1/5AB and stated that this amount is mentioned in circle A& B in both the invoices. The witness could not tell as to who has affixed signatures on both the cheques in question, however, stated that both the cheques in question have been signed by the Authorized Signatory of Accused No.1 company. He admitted that he has not filed any document to show that the complainant company is registered with the Registrar of Companies. He stated that he could not tell as to how many directors are there in the complainant company as on 16.09.2021 and stated that he can answer this fact only after looking at ROC record of their company. He also stated that he could not say whether Mr. Abhiroop Gupta has been authorized by other directors of the company for authorizing him to issue Board of Resolution dated 16.09.2021 EX. CW1/1 and stated that he will have to check ROC record for the same. He admitted that the board resolution EX. CW1/1 has been singed by only one of the director of the complainant company namely Mr. Abhiroop Gupta. He also admitted that the accused company has filed reply to their legal demand notice which is EX. CW1/13. He denied the suggestion that he was not aware of the contents of the reply EX. CW1/13. He admitted that as per their ledger the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2022.12.16 17:18:17 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 7 outstanding liability of accused as on 24.08.2021, is Rs. 4,94,007/. He stated that the outstanding balance as on 24.08.2021 as shown in their ledger is Rs. 4,94,007/, after receipt of Rs. 10,000/ on 30.07.2021 and further Rs. 10,000/ on 24.08.2021 through NEFT in their account and stated that as on 30.07.2021, the outstanding amount was Rs. 5,14,007/. He further stated that on the date of dishonour of the cheque the outstanding liability of the accused was Rs. 5,14,007/. He denied the suggestion that there is difference in this amount as the particulars of the cheque in question were filled by them and the blank cheques in question were given to them as security by the accused persons. He denied the suggestion that the accused persons have no legally enforceable liability for the cheque amount towards the complainant company. He also denied the suggestion that they have supplied substandard goods to the accused due to which he had suffered loss of his reputation and monetary loss of Rs. 40 lacs in the market. He also denied the suggestion that they were informed verbally and telephonically regarding defective supply of the goods and that upon such communication, they accepted their mistake and assured not to repeat this again. He also denied the suggestion that email communication dated 30.07.2021 EX.CW1/9 is not mentioned in the list of documents which was filed at the time institution of the complaint. He also denied the suggestion that he has filed this document without obtaining permission of this Court. Thereafter, CE was closed vide separate statement of complainant.
8. Examination of the accused under section 313 Cr.P.C: The accused persons were examined under section 313 Cr.P.C. on 18.10.2022. The accused Mr. Goutam Chakraborty admitted that he along with accused Mr. Devendra Yadav is responsible for carrying out day to day activities of the accused NO.1 Company and they are responsible for managing and controlling it's affairs. He admitted that they approached the complainant company which is a MSME engaged in the business of Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2022.12.16 17:18:37 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 8 manufacturing of construction material, for supply of various products manufactured by the complainant company with the assurance to make payment for the same in timely manner and as per the invoices raised by the complainant. He admitted that they received goods vide invoice EX.CW1/5A dated 12.03.2021 and EX.CW1/5B dated 08.04.2021 for total amount of Rs. 5,14,008/. He denied that the cheques in question were issued for the outstanding liability towards the complainant for the material supplied by the complainant company and stated that the cheques in question were given as security. He admitted that the cheques in question upon presentation were dishonoured vide return memo dated 30.07.2021 EX. CW1/A & EX. CW1/B. He denied having knowledge about receiving of email Communication dated 23.07.2021 from the complainant requesting to clear the outstanding amount and filing reply EX. CW1/9 vide email dated 30.07.2021 to the same. He admitted receipt of legal demand notice dated 16.08.2021 i.e. EX. CW1/10 and he also admitted that they did not make the payment to the complainant despite receipt of legal demand notice. He admitted sending e mail communication EX. CW1/13 in reply to the legal demand notice and stated that vide this email, they informed the complainant that the material supplied to them was not upto the mark and they asked the complainant to take the material back. He stated that he is not aware as to who has signed the cheques in question. With respect to particulars in the cheques in question, he stated that the same must have been filled by someone from their account department. He admitted knowing the complainant company and doing business with the complainant company for 1 year prior to the transaction in question.
9. Similarly, accused Devendra Yadav, admitted that he along with accused Goutam Chakraborty were directors of accused No.1 company and stated that they had employed different people for managing the affairs of the accused company. He admitted that they have received supply of goods of Rs. 5,14,008/ from the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2022.12.16 17:18:43 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 9 complainant company vide Invoices Ex. CW1/5A dated 12.03.2021 and EX. CW1/5B dated 08.04.2021 but stated that the goods supplied by complainant company were not of good quality, due to which they had to incur losses of Rs. 40 lakhs and their reputation in the market also suffered. He denied that the cheques in question, were given in discharge of their liability against the goods received and stated that the cheques in question were given as security. He admitted that the cheques in question upon presentation were dishonoured vide return memos dated 30.07.2021 EX. CW1/A & EX. CW1/B. He denied having knowledge about receiving of email Communication dated 23.07.2021 from the complainant requesting to clear the outstanding amount and filing reply EX. CW1/9 vide email dated 30.07.2021 to the same. He admitted receipt of legal demand notice dated 16.08.2021 i.e. EX. CW1/10 and also admitted that they did not make the payment to the complainant despite receipt of legal demand notice. He admitted sending email communication EX. CW1/13 in reply to the legal demand notice and stated that vide this email they informed the complainant that the material supplied to them was not upto the mark and they asked the complainant to take the material back. He stated that he did not sign the cheques in question. With respect to particulars in the cheques in question, he stated that the same must have been filled by someone from their accounts department. He admitted knowing the complainant company and doing business with the complainant company for 1 year prior to the transaction in question. The accused persons stated that they intend to lead defence evidence.
10. Evidence on behalf of Accused: In their defence, the accused persons have examined accused Devendra Yadav as DW1 who stated that he has never done any business with the complainant company neither as Director nor official of the company. He further stated that the complainant company allured their company by stating that they were well known renowned and good business house and having Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2022.12.16 17:18:49 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 10 their potentiality of supply of admixture chemical generally used in construction materials and the complainant company also assured to maintain the said supply of materials without any dispute. They also assured that the company does not compromise with the quality therefore the accused company started business with the complainant company. But after some consignment, the complainant company supplied material which was contaminated, of low quality and inferior, therefore the accused company could not use those materials and resultantly, they could not supply their consignment material/ready mix concrete to their clients for which they suffered and sustained a huge loss of amount Rs. 40 lakhs approximately. He further deposed that after supply of inferior quality of chemicals by the complainant company, accused company had time to time communicated complainant company about the low quality material which could not be used in concrete mixture for safety and security of building and all the time, the official of the complainant company assured the accused company that they shall take back the said low quality material and shall not raise any charges/price of the materials. He further deposed that complainant company before beginning the dealings officially took few blank signed cheques from the accused company as security and the process of taking those cheques were expressed so casual as same was part of the business deal and assured not to use the said cheques at any point of time. Believing such assertions and undertaking of the official of the complainant company, they gave few numbers of blank signed cheques to the complainant company and the complainant company misused the undertakings and illegally filled up the cheques in question without taking any permission and intimation from the accused company and presented the two said cheques in the bank and after dishonour of the same, filed this false and fabricated case. He further deposed that the cheques in question were not filled and signed by him and by any of the directors of accused company. He stated that accused company gave the reply of Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2022.12.16 17:18:57 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 11 the demand notice which is already part of record as EX. CW1/13. He further deposed that the complainant company falsely and with ulterior motives filed the present case and illegally used these two security cheques in question. He stated that the accused company has no financial, equitable Liability towards the complainant company.
11. During his cross examination, DW1 stated that he is the director of Accused company since the year 2015 i.e. since it's incorporation. He stated that he has never dealt with the complainant company himself for purchase of products and all the transactions with the complainant company were done by their purchase department. He stated that he does not have knowledge about the time since when the complainant company is in business transaction with the accused. He stated that he does not know who dealt with complainant company from their purchase department and stated that She has never seen the invoices in question and he will have to check the same from their purchase department. He admitted that their company is doing business transactions with the complainant company since the year 2017 and as per the ledger EX. CW1/6, the last invoice was issued in the year 2021.
He stated that in the whole period of their business transaction, he has never faced any quality issue with the complainant company except the last few transactions. He stated that he will have to check about the transactions in which there were quality issue of goods faced by their company. He admitted that he had never written any complaint regarding the quality of goods to the complainant company but stated that they had verbal talks regarding the same with the complainant company. He further stated that he personally never spoke to any of the official of the complainant company regarding the said issue. He admitted that the product supplied by complainant company was utilized by accused company and it was never returned to the complainant company. He stated that the reply Ex. CW1/ 13 dated 28.08.2021 Digitally signed by AISHWARYA SHARMA AISHWARYA Date: SHARMA 2022.12.16 17:19:05 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 12 does not bear his signatures.
12. Final Arguments: Learned counsel for the complainant with the help of Section 118 (a) and Section 139 of the Act argued that complainant has successfully proved guilt of accused for the commission of offence punishable under Section 138 of the Act beyond all reasonable doubt by way of ocular as well as documentary evidence on record. On the other hand, Learned counsel for the accused argued that the complaint is not maintainable as the AR has not been properly authorized. He further stated that the complainant has failed to establish the guilt of the accused persons as it has failed to prove the service of legal demand notice upon the accused persons. Further, it has failed to establish that the cheques in question have been signed by the accused persons and that its particulars have been filled by the accused persons. He further stated that the complainant company has failed to establish existence of legally enforceable debt as the material supplied by the complainant company was defective. He further argued that the complainant company has also failed to prove that the accused NO.2 & 3 were active directors of accused No.1 company. Lastly, Ld. Counsels for accused persons argued that the cheques in question could not have been presented for entire amount as the complainant company has failed to reflect/deduct the amount of Rs. 10,000/ received from the accused company on 30.07.2021. With these submissions, Ld. Counsel for accused persons argued that since the basic ingredients of Section 138 of NI Act have not been established by the complainant company, the accused persons must be acquitted. After hearing final arguments on behalf of both the parties, the matter was then reserved for judgment.
13. In order to ascertain whether the accused has committed the offence under Section 138 of the NI Act, it is deemed fit to examine separately as to whether all the indispensable ingredients constituting the offence have been proved by the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2022.12.16 17:19:12 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 13 complainant.
14. In the present case, presentation of the impugned cheques Ex. CW1/7A & EX. CW1/7B for encashment is not in dispute. As per record, both these cheques in question were dishonoured with remarks "Funds Insufficient" vide return memos Ex.CW1/8A & Ex. CW1/8B both dated 30.07.2021. This fact has also been admitted by both the accused persons in their statement of admission & denial recorded U/S 294 Cr. P.C. It is pertinent to point out that both the accused persons have admitted their signatures on the cheques in question during notice framed U/S 251 Cr. P.C, however, they have denied their signatures on the cheques in question during their statement recorded U/S 313 Cr. P.C. However, once the accused persons have admitted correctness of dishonour memo which carries presumption of correctness as per section 146 of NI Act, according to which the cheques have been dishonoured with remarks "funds Insufficient", onus comes upon the accused persons to establish that the signatures on the cheques in question are not of the accused persons, but of some other person. Further, it is general banking parlance that when a cheque is presented for encashment, the first thing that the banker does is tallying the signatures of the drawer with the specimen signatures with the bank. Only when this step is cleared, the Banker moves further for encashment. In the present case, the account number is not disputed by the accused persons and they have only disputed their signatures, that too at the stage when their statement U/S 313 Cr. P. C was recorded but the accused persons have not lead any evidence cogent evidence to disprove the correctness of dishonor memo. The accused persons could have proved that their signatures are not in the return memo by examining concerned bank officials but accused persons have not made any efforts to do so, which further suggests that the return memo righly mentions the reason for dishonour as "funds Insufficient". Since, the dishonour memo carries presumption of correctness as per section 146 of NI Act Digitally signed by AISHWARYA SHARMA AISHWARYA Date: SHARMA 2022.12.16 17:19:19 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 14 and the accused has not lead any evidence to rebut the same, therefore, it stands established that the cheques in question were dishonoured due to insufficient funds and not due to mismatch in signatures.
15. Accused person have also tried to dispute their liability by claiming that the legal demand notice was not delivered upon them, however, the accused persons in their statement U/S 251 Cr. P.C as well as in their statement U/S 313 Cr. P.C have admitted that the legal demand notice was sent at the correct address. Though in their statement U/S 251 Cr.P.C, the accused persons have disputed the service of legal demand notice, however, in their statement U/S 313 Cr. P. C, the accused persons have admitted that they have received the legal demand notice and even filed reply to the legal demand notice dated 16.08.2021 i.e. EX. CW1/10, through e mail, which is part of record as EX. CW1/13. In view of such admission of the accused persons, the service of the legal demand notice upon the accused persons is established.
16. Ld. Counsel for the accused persons have also argued that accused persons are not liable for dishonour of the cheques in question, as they were just sleeping partner in the accused No.1 company, however, the accused persons have not lead any evidence to establish such fact. No such suggestion were even put to CW1 during his cross examination. In absence of any evidence to this effect, the version of accused persons being sleeping partner cannot be relied upon specifically when accused persons themselves have not stated so anywhere either in notice U/S 251 Cr. P. C or either in statement recorded U/S 313 Cr. P. C or even during examination of accused Sh. Devendra Yadav as DW1. The testimony of CW1 and documentary evidence lead by the complainant suggests that both the accused No.2 & 3 are active directors of the accused No.1 company and admittedly the cheques in question have been issued from the account of Accused No.1 Company. Since the accused persons Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2022.12.16 17:19:24 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 15 have not lead any evidence to prove that they were not active directors which could establish that they were not incharge or responsible for the conduct of the business and day to day affairs of the accused No.1 company at the relevant point of time. Thus, they shall be deemed to be guilty of offence committed by accused No. 1 company as per Section 141 of NI Act.
17. Accused persons have also tried to dispute their liability by claiming that the AR of the complainant company did not have authority to file this case as he has not been properly authorized to file this complaint. During final arguments, Ld. Counsel for accused even argued that the Board of Resolution EX. CW1/1 executed in favour of AR Sh. Sandeep Chatterjee is not valid as no date is mentioned on this board of resolution. However, perusal of EX. CW1/1 reveals that the date i.e. 16.09.2021 is mentioned on EX. CW1/1. Further, regarding validity of this resolution, questions were put to the complainant during his crossexamination as to how many directors were there in the complainant company and whether Mr. Abhiroop Gupta has been authorized by other directors of the complainant company to issue board of resolution in favour of Mr. Sandeep Chatterjee. In response to both the questions, the witness/CW1 responded that he will have to check the ROC record for the same, but accused persons did not demand record of ROC from CW1 and they did not even themselves filed any document/ROC to establish that there were other directors in the complainant company on 16.09.2021, to establish that CW1/1 has not been properly executed. As per section 142 of NI Act, a complaint U/S 138 NI Act has to be made by a Manager/ Authorised person on behalf of the payee / holder in due course i.e. the complainant company and as per EX. CW1/1, Mr. Sandeep Chatterjee is authorized person of the complainant company and as discussed above, it is established that the complainant company is the payee/holder in due course as the complainant has supplied goods to the accused company and has Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.12.16 17:19:29 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 16 received the cheques in question for payment of the same. On the point, I draw reference on judgment of Hon'ble Supreme court in Shankar Finance Investments Vs. State of Andhrapradesh and Ors. (2008) 24 CLABL Supp 62 (SC), wherein the Hon'ble Supreme Court observed that "...the requirement of Section 142 of the NI Act are that the complaint should be in writing and the complainant should be made by the payee and holder in due course... once the complaint is in the name of the payee and is in writing, the requirement of Section 142 are fulfilled..."
On this point, reference can also be drawn from Eita India Pvt. Ltd. v NCT of Delhi (2003) 114 Comp Cas.32(Del.) wherein it was held that "... the conspectus of judicial opinion establishes a principle that complaint in respect of the offence punishable U/s 138 of the Act need not be personally filed by the payer or holder in due course. It can be filed by a natural person to act as defacto complainant..."
18. As per Section 142 of the NI Act, a manager or any other person authorized by the complaint can represent it during the course of legal proceedings before the court and file a complaint. Since, in the present case the complaint has been filed by the Authorised Representative of the complainant company regarding the cheques in question which were issued for payment of material supplied by the complainant company to the accused firm and accused persons have also admitted that they have received goods from the complainant company as per invoices EX. CW1/5A dated 12.03.2021 and as per Invoices EX. CW1/5B dated 08.04.2021, thus, it cannot be said that Mr. Sandeep Chatterjee is not authorized to pursue this complaint on behalf of complainant company.
19. Accused persons have also tried to dispute their liability by claiming that the cheques in question were given as security and they have not filled particulars of the same as such they have no liability for making payment of the cheque amount. It Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.12.16 17:19:37 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 17 is pertinent to mention here that both the accused persons in their statement U/S 313 Cr. P.C have admitted that the particulars in the cheques in question were filled upon their instructions by someone from their account department. Similarly, in notice framed U/S 251 Cr. P. C also both the accused persons have admitted that the particulars in the cheques in question have been filled by their staff. In view of such admissions of accused persons, it cannot be said that the cheques in question were given as security and not in discharge of the existing liability of accused persons for payment of the goods supplied by the complainant company, as the date of drawl mentioned in both the cheques is 25.05.2021 and 10.06.2021 and the goods were delivered by the complainant company to the accused company in MarchApril,2021. Further, the accused persons in their reply sent on 30.07.2021 to e mail i.e. EX. CW1/9 have themselves, admitted that they have outstanding dues of Rs. 7,71,012/ towards the complainant and they had also undertaken to clear the dues part by part, which suggests that the cheques in question were issued in discharge of existing liability and not as security as claimed by accused persons.
20. Further, it is no more resintegra that the particulars of the cheques in question were not filled by accused persons is no defence in a trial U/S 138 of NI Act. The accused is liable for the offence under Section 138 NI Act, even if particulars of the cheque are not filled by the drawer of the cheque, if the liability of the drawer of the cheque / accused is proved as per law. Hon'ble High Court of Delhi in Ravi Chopra v State and Anr., 2008 SCC OnLine Del 351 has discussed in detail the issue related to the defence that there was no liability as cheque was given in blank. It has been held that " ...Even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either implicitly or expressly to the said cheque being filled up at a Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2022.12.16 17:19:42 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 18 subsequent point in time and presented for payment by the drawee. In the present case also, therefore, the defence taken by the accused persons that the cheques in question were blank, is no defence to avoid the liability as it has been established that the cheques in question were signed by the accused persons..."
21. Accused persons have also tried to dispute their liability by claiming that the material supplied by the complainant was not of good quality. It is pertinent to point out that suggestion regarding this fact was given to CW1 during his cross examination, however, CW1 denied that the complainant company has supplied substandard goods to the accused persons due to which the accused company suffered monetary losses. He even denied the suggestion that the accused company informed them verbally and telephonically regarding defective supply of the goods and they accepted their mistakes and assured not to repeat the same. DW1 during his cross examination has also admitted the fact that accused company was doing business with the complainant company since the year 2017 and had received supply from the complainant company for the last time in the year 2021 against the invoices raised and he never faced any quality issue with the complainant company except last few transactions. He also admitted that he did not write any complaint regarding the quality of goods to the complainant company and stated that the accused company had verbal talks regarding the same with the complainant company and he also admitted that he never spoke to any of the official of the complainant company regarding this issue. DW1 did not even disclose name of any official of the accused company who talked to the complainant company regarding such supply of substandard material and he did not even disclose date, time and month when such complaint was raised. He even admitted that accused company has utilized the product of complainant company and never returned the same. In view of such admissions of the accused and in absence of any other cogent evidence on the record, Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2022.12.16 17:19:47 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 19 it cannot be relied upon that the material supplied by the complainant company was not of good quality when admittedly the same has been utilized by the accused company and there is no written communication between the parties regarding such defective supply of products specifically, when parties have been communicating with each other through email and also specially keeping in view the fact that even on the date of dishonour of the cheques i.e. 30.07.2021, vide email communication EX. CW1/9 dated 30.07.2021, the company has admitted having outstanding dues of Rs. 7,71,012/ towards the complainant company.
22. The accused persons have also tried to dispute their liability by claiming that they cannot be made liable for dishonour of the cheques in question as the complainant could not have presented the cheques for the total amount mentioned in the cheques without making any endorsement for part payment of Rs. 10,000/ received by complainant company on 30.07.2021. In support of this submissions Ld. Counsel for accused has relied upon the judgment titled as Dashrathbhai Trikambhai Patel v Hitesh Mahenderbhai Patel & Anr. CRL. Appeal No. 1497 of 2022 decided on 11.10.2022. However, this judgment is not applicable to the facts of this case. As per this judgment, if the drawer of the cheques receives part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque. However, in the present case, as per undisputed invoices and ledger of the complainant, the outstanding liability uptill 30.07.2021, was equal to the cheque amount i.e. Rs. 5,14,007/ and from the date of drawl of both the cheques (25.05.2021 and 10.06.2021) till the date of presentation i.e. 28.07.2021, no payment was made by the accused company and for the first time, payment of Rs. 10,000/ was received by the complainant company from the accused company on the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.12.16 17:19:51 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 20 date of dishonor of the cheques i.e. 30.07.2021. There is nothing on record to establish that this payment of Rs. 10,000/ was made before dishonour of cheques. Thus, the defence taken by the accused company that the complainant company could not have presented the cheques for the total amount mentioned in the cheques without making any endorsement for part payment of Rs. 10,000/ persons is not tenable.
23. Thus, now the only question remaining for determination is whether a legally valid and enforceable debt existed qua the complainant and the cheques in question was issued in discharge of said liability / debt. It is pertinent to note that Section 139 of the NI Act provides a statutory presumption that the cheque was handed over in respect of a debt or other liability. Under Section 118 of the NI Act, every negotiable instrument is presumed to have been drawn and accepted for consideration. However, this presumption is rebuttable. In the case of K. N. Beena v Muniyappan, AIR 2001 SC 2895, it was observed as follows:
"...Thus, in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal v Bratindranath Banerjee has also taken an identical view..."
24. The Hon'ble Supreme Court, in the case of Hiten P. Dalal v Bratindranath Banerjee (AIR 2001 SC 3897) observed as follows:
"...Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras v A. Vaidyanatha Iyer, (AIR 1958 SC 61), it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.12.16 17:19:56 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 21 on to the accused (ibid)...."
25. Also, in the case of K. Bhaskaran v Sankaran Vaidhyan Balan 1999 (4) RCR (Criminal) 309, it has been held by the Hon'ble Supreme Court as under:
"...As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability..."
26. Further, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". In Rangappa v Srimohan (2010) 11 SCC 441, the Hon'ble Supreme Court has observed:
"...Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own..."
27. Thus, as laid down in catena of decisions, it is an established law that onus lies upon the accused to rebut the presumption and to establish that the cheque in question was not given in respect of any debt or liability, with the standard of proof being preponderance of probabilities. However, as discussed above, it is established that the cheques in question were issued by the accused persons in discharge of their liability for payment of goods received from the complainant company and accused persons have failed to establish their defence that the goods supplied were not of Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.12.16 17:20:00 +0530 CC NI ACT No.7888of 2021 M/s CICO Technologies Vs. Six Season Concertex Pvt. Ltd. Page No. 22 good quality. Further, as discussed above all the essential ingredients of offence U/S 138 of NI Act also stands established.
28. Ratio: Since in the instant case, the accused persons have failed to lead any convincing evidence to aid them in discharge of their onus and the presumption of law operates in favour of existence of debt or liability. Thus, having considered the entire evidence, I am of the opinion that the complainant has successfully proved all the essential ingredients of Section 138 of the Act. Accordingly, accused persons namely Devendra Yadav and Goutam Chakraborty, Directors of accused No.1 M/S Six Season Concertex Pvt. Ltd. are found guilty of offence U/S 138 NI Act. Let they be heard on point of sentence on another date.
29. Let the copy of this judgment be given to the convict persons free of cost and the same be also uploaded on CIS and Layers forthwith.
Digitally signed by AISHWARYA AISHWARYA SHARMA
SHARMA Date:
2022.12.16
17:20:04 +0530
Announced in the open court on (Aishwarya Sharma)
this day i.e.16.12.2022 MM (N.I. ACT)Digital Court02/SED,
Saket Courts, New Delhi