Delhi District Court
Hathway Cable Datacom Ltd vs Joginder Sharma Etc on 5 February, 2024
IN THE COURT OF MS. DEEPAKSHI RANA: MM-01 (N.I.ACT): SOUTH-EAST
DISTRICT, SAKET COURTS COMPLEX: NEW DELHI
Hathway Cable and Datacom Ltd V/s Joginder Sharma & Ors.
CT No. 623996/16
U/s 138 Negotiable Instruments Act, 1881
1. CNR number : DLSE02-004477-2014
2. Name of the complainant : Hathway Cable and Datacom Ltd
having its registered office at "Rahejas
4th Floor", Corner of Main Avenue and V.
P. Road, Santacruz (W), Mumbai-400
0054 and regional office at AB-6, 2 nd
Floor, Safdarjung Enclave, New Delhi-
110029
Through its Authorized Representative
Mr. Ram Prakash
3. Name of the accused , parentage & : 1. Mr. Joginder Sharma
residential address son of not known resident of A-78,
Shanker Garden, New Delhi-110018
2. M/s Star Services Cable
Through its proprietor Mr. Joginder
Sharma
Having office at C-87, Khazan Basti,
Mayapuri Industrial Area, Phase-II,
New Delhi-110018
4. Offence complained of or proved : U/s 138 of Negotiable Instruments Act,
1881
5. Plea of the accused : Pleaded not guilty and claimed trial
6. Final Judgment/order : Acquitted.
7. Date of judgment/order : 05.02.2024
Date of Institution : 27.09.2014
Date of Reserving Judgment/Order : 30.01.2024
Date of Pronouncement of Judgment/Order : 05.02.2024
JUDGMENT-
1. By way of the present judgment, this Court shall dispose off the present
complaint filed by Hathway Cable and Datacom Ltd (hereinafter referred to as
'complainant') against Joginder Sharma as proprietor of the firm M/s Star Service
CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 1 of 14
Cable (hereinafter referred to as 'accused') u/s 138 of Negotiable Instruments Act,
1881 r/w Section 142 Negotiable Instruments Act, 1881 (hereinafter referred to as
'N.I. Act' in short).
Brief Facts:-
2. The case of the complainant is that the complainant Hathway Cable & Datacom pvt Ltd is a company duly incorporated under Indian Companies Act and has filed this case through Mr. Ram Prakash as authorized representative appointed vide resolution of the Board of Directors dt. 23.04.2013 of the company. The complainant company is engaged in the business of communication network including supply of various programmes and cable TV signals feed through trunk lines for further retransmission through its various franchisees and that the accused is carrying on the business of Cable T. V. in various areas of Mayapuri, Sagarpur and Uttam Nagar, New Delhi and was working under the name and style of M/s Star Services Cable as affiliate /Distributor of the complainant. It is stated in the complaint that on advent of Digital addressable system i.e. from 01.11.2012, the respondent entered into an agreement with the complainant for availing the digital cable TV Signals from the complainant. Further, respondent in violation of various clauses of the said agreement particularly clause 3 has migrated to competing MSO without following the law by not issuing any notice under interconnect regulations in addition to the same. It is stated that respondent has cheated the complainant and have abruptly switched off the signals provided by the complainant without following the provisions of law in breach of various terms of the agreement which has caused great inconvenience to the customers. It is further alleged that they informed the respondent that due to sudden disruption of channels, the customers are suffering but the respondent did not pay any heed to the request of the complainant. It is CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 2 of 14 further stated in the complaint that accused issued a cheque bearing No. 384974 dt. 12.01.2013 amounting to Rs. 5,00,000/- towards part payment of his dues of subscription charges and complainant presented the abovementioned cheque to their bankers for realization of the same but the same was returned unpaid by the banker with the remarks as "Exceeds Arrangement". Thereafter, complainant again asked the accused for making the payment of the aforesaid cheque but to no avail. Thereafter, compelled by the circumstances, complainant sent a legal notice dated 07.03.2013 u/s 138 NI Act calling upon the accused to make the payment within 15 days of the receipt of the legal notice as prescribed u/s 138 of the N.I. Even after the expiry of 15 days stipulated period from the date of receipt of notice, the accused did not make the payment and hence, the present case was filed by the complainant.
Proceedings before the court:-
3. The cognizance of the complaint was taken and on the statement of AR of the complainant, accused No. 1 was dropped and only accused No. 2 was summoned vide order dt. 14.01.2015 as it is a proprietorship concern and Joginder Sharma is its proprietor. The notice u/s 251 Cr. P.C was served upon the accused on 21.09.2015 to which accused pleaded not guilty and claimed trial. Thereafter, statement of accused u/s 313 Cr. PC was recorded on 07.08.2019 wherein accused chose to lead defence evidence. The opportunity to the accused to lead defence evidence was granted and accused got himself examined to prove his case.
Thereafter, the matter was listed for final arguments. Final arguments were heard on behalf of both the parties.
Arguments raised by the parties:-
4. Complainant has argued that all the requirements of Section 138 NI Act have CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 3 of 14 been fulfilled by the complainant in the present case and he has proved his case beyond reasonable doubt. It has been further argued by the Ld Counsel for complainant that the accused has failed to prove his defence and has also failed to rebut the presumption drawn u/s 118 of NI Act about existence of debt/liability in favour of the complainant and therefore, accused is guilty of offence punishable u/s 138 NI Act.
5. On the other hand, Ld Counsel for the accused has argued that accused has no liability towards the complainant. Complainant has filed a false case against the accused as there was no transaction between the complainant and the accused as alleged in the complaint. Instead, this cheque was issued as a security cheque to complainant by him at that time of providing distributorship of their company to the accused and that this cheque was misused by the complainant against him and this case has been filed to implicate him on false grounds therefore he pleads acquittal.
Legal provisions invoked:-
6. For deciding the present case, it is essential to lay down the ingredients of the offence under Section 138 NI Act which are as follows:
(a) A person must have drawn a cheque on an account maintained by him in a bank.
(b) The cheque must be drawn for payment of certain amount of money to another person to discharge in whole or in part, any legal enforceable debt or other liability.
(c) The cheque has been presented to the bank and is returned unpaid by the bank either due to insufficiency of funds or it exceeds the amount arranged to be paid from that account by an agreement made with that bank.
(d) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing to the drawer of cheque within stipulated period.
(e) The drawer fails to make payment within stipulated time after the receipt CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 4 of 14 of the said notice. [Reference: Kusum Inglots & Alloys Ltd & Ors v. K Pennar Peterson Securities Ltd and Ors (2000) 2 SCC 745].
7. A negotiable instrument including a cheque carries presumption of consideration in terms of Section 118(a) and under Section 139 of the Act.
Section 118 Clause (a) of Negotiable Instruments Act reads as under:-
"That every negotiable instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration".
Section 139 of the Negotiable Instruments Act reads as under:-
"It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, or any debt or other liability."
The combined effect of Section 118(a) and Section 139 of NI Act is that it raises a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability.
8. In the case of M/S Kalamani Tex vs P. Balasubramanian Criminal Appeal No. 123 of 2021, the Hon'ble Supreme Court has held:
The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then the 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him.
Based on the evidence led and documents relied upon by the complainant and in view of the above judgment, once the accused has admitted his signatures on the cheque in question in the present case, presumption u/s 118 and 139 of NI Act is drawn in favour of the complainant. Now it is upon the accused to rebut the presumption u/s 139 of NI Act by raising a probable defence in his favour on a scale CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 5 of 14 of preponderance of probabilities. It is open for the accused to rely on evidence led by him or evidence adduced on behalf of the complainant and the materials submitted by the complainant in order to raise a probable defence. [Reliance placed on: Rohitbhai Jivanlal Patel Vs. State of Gujarat and Ors AIR 2019v SC 1876; M.S. Narayana Menon Vs. State of Kerala, (2006) 6 SCC 39;].
9. Coming to the present case, the complainant has relied upon his complaint, Evidence Affidavit Ex. CW1/A and original documents Ex. CW 1/1, Ex. CW 1/1A to Ex. CW 1/ 8 in order to prove essential ingredients of Section 138 NI Act. Further, the accused has admitted signatures on the cheque, issuance of the cheque in question as well as receipt of legal demand notice in his notice framed u/s 251 Cr. P.C.
10. In addition to relying upon the documents placed on record as stated above out of which Ex. CW 1/ 4 which is the statement of account was de-exhibited for want of certificate U/s 65 B Indian Evidence Act, complainant has subjected himself to cross examination on oath before the court wherein AR of the complainant deposed before the court. Relevant extracts from the deposition of the AR for complainant have been discussed below:-
It has been stated by AR that he has been working with the complainant company since 2007 as Sr. Manager Operation and his job profile includes execution of distribution, supply of set top boxes and to provide technical assistance to the customers of the company. It has further been deposed that he had no personal knowledge about the transaction between the accused and complainant company and that he was deposing based on the records of the company. On being cross examined, it was stated by the witness that no written information was sent to legal department for the dispute between the parties and CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 6 of 14 that the present matter was discussed by him with Manager Operation Mr. Puran Pal Raj in the month of January and February. It was further admitted by him that no written communication was exchanged with the accused qua the present dispute by him. He further deposed that no proof was filed on record by the complainant of obtaining DAS license from the concerned authority however, permission was obtained from authority to lay down the fiber optic lines which is Ex. CW 1/X and that the complainant company started providing signals for fiber optic cable line in November, 2015. It has further been stated that complainant came to know about the violative act of accused in January, 2013. It was admitted by the AR on behalf of complainant company that no written complaints were received against the accused by them and that they got to know about the said violation when the then Manager visited the accused to receive the payment. It was also admitted that at the time of purchase of set top box, the accused had handed over the cheque which is not the cheque in question in the present case and after the encashment of the aforesaid cheque, the complainant company delivered the set top box. The suggestion given to the witness regarding the fact that services were not provided to the distributor as per agreement and that the set top boxes provided were faulty was categorically denied.
11. Coming to the version of the accused in the present case, the accused has admitted his signature upon the cheque in question as well as issuance of cheque in question to the complainant in notice U/s 251 Cr. PC. Further, while recording of notice U/s 251 Cr. PC, accused has taken the defence that "The complainant has taken advance cheque from me as security before granting me distributorship as per their company policy. I do not owe any liability towards the complainant. The cheque in question has been misused by the complainant. CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 7 of 14 The complainant rather owes commission to me and they have to pay me".
In his statement u/s 313 Cr. P. C, the accused has categorically admitted the issuance of cheque in question to complainant and further stated that "I have entered into two agreement one for distributorship and another for being the operator. Against the said agreement of distributorship, I had given him Rs. 60,00,000/- by way of few cheques of Rs. 5,00,000/- each. Against the agreement for distributorship, I have issued one cheque of Rs. 5,00,000/- as a security cheque. The said security for providing the fiber line however the complainant do not provide me any such services. They had not provided me any service for the distributorship agreement which was entered into between us". It has further been stated by the accused on on being inquired by the court in his defence that he was not provided the cable line that was required as per distributorship agreement therefore, no liability arises towards the complainant.
Coming further to the defence put forth by the accused, he stepped himself into the witness box and subjected himself to cross examination. Relevant extracts from his testimony have been discussed below:-
It has been stated by the accused that he worked as a cable operator and used to work as a super distributor of I.N. Cable . After the government policy for installation for set top boxes came into effect, complainant approached him to make him a distributor. It has been stated that complainant company had a policy under which he would have to take thousand set top boxes at one go from the complainant company and that complainant company in total would give ten thousand set top boxes. It has further been asserted that employees of complainant company kept supplying thousands set top boxes at one go to him and kept taking payment of Rs. 5,00,000/- in lieu of that adding to Rs. 50,00,000/- to Rs. CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 8 of 14 60,00,000/- as total payment made by him. Accused admitted the issuance of cheque in dispute to Sudhir Mongia as a post dated cheque towards security deposit. Accused alleged that no fiber optic cable or machinery thereof required was provided to him by the complainant. He also admitted the running of M.K. Cables as Cable operator and himself to be the proprietor of Star Services Cable. Accused has also denied making any written complaint to complainant company or TRAI and signatures upon the invoices running into eight pages filed by the complainant mark A-1. Accused has further denied specifically any liability towards the complainant as subscription charges.
Analysis of Evidence:-
12. In the present matter, distributorship agreement Ex. CW 1/ 1A, the cheque in dispute Ex. CW 1/ 2, return memo Ex. CW 1/ 3, notice and postal receipt Ex. CW 1/5 have not been disputed by the accused. Signatures on the cheque and issuance thereof has also remained undisputed throughout the case proceedings. Even, the fact of purchasing and supplying of set top boxes on complete payment by accused is not in dispute. The complainant has alleged that this cheque was given to the complainant by the accused against the part payment of subscription charges which was dishonoured subsequently and that accused has cheated with them by switching off to some other company before putting the same into their notice as required by the distributorship agreement entered into by both the parties. The only defence raised by the accused in the present matter is that he was not liable to pay any subscription charges as the cable Optic Fiber line was never provided to him by the complainant and that he was never able to provide the signals to the customers as required. Therefore, no question arises regarding switching off to other company or non payment of subscription charges. CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 9 of 14 As per the law discussed above, once the signatures have been admitted by the accused on the disputed cheque, the presumption U/s 139 and 118 (a) NI Act arises and it is presumed that the cheque was issued in furtherance of legally enforceable liability by the accused unless proved otherwise.
In the context of the present matter, certain relevant factors and material inconsistencies remained unexplained on the part of the complainant in hands weighed in favour of accused.
(i) In para No. 5 and 6 of the complaint itself, it has been alleged by the complainant that accused switched off the signals sent by the complainant company abruptly without giving notice to them and that they were receiving the complaints from the customers regarding the inconvenience caused due to the mis conduct of the accused. However, nothing has been broughtforth on record to prove the same. Infact, the AR for the complainant denied receiving any complaint from the customers in writing and on the contrary asserted the fact that misconduct of the accused came into their knowledge when the then Manager visited the accused for receiving the payment.
(ii) Secondly, it has been alleged by the accused in his defence that as he was not provided with signals by the complainant himself, he could not further provide the same to the customers. Accused has also stated that as there was no connection given to the customers by him as distributor for complainant company therefore, no customer application form has been submitted by him to the complainant. On the other hand, it has been repeatedly alleged by the complainant that they were providing signals continuously to the customers and the payment that was pending upon the accused were the subscription charges in lieu of which the cheque was issued. It is a common practice adopted in trade that a record is CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 10 of 14 maintained regarding the customer or subscribers on the basis of which, subscription charges are assessed. It is noteworthy here that no customer application form(CAF) have been filed on record by the complainant which would have been mandatorily lying with them in case any signals were being provided by them to the customers to support their claim. No document have been furnished by the complainant company so as to prove the total number of active subscriptions to their services for whom the subscription charges were being assessed and levied.
Nothing has been brought forth which could prove that previously the subscription charges were being collected in any form for active subscribers.
(iii) The distribution agreement that is not in dispute between the parties also contains schedule D which lays down the subscription revenue sharing basis between the complainant company and the distributor which contains different clauses regarding the percentage to be paid to the distributor out of the amount received from active subscribers. No document have been furnished on record by the complainant showing the fact that any payment was made to the distributor for extending the companies' subscription to the customers which further creates doubt upon the story of the complainant that signals were being provided continuously by them to the accused which were abruptly switched off by the accused as alleged.
(iv) Complainant has further alleged that smart cards were issued by them which means that the set top boxes were active and to prove the same, they have furnished certain invoices which shows that smart cards were handed over to the accused. Accused has denied his signatures upon the invoices furnished by the complainant as mark A-1. Complainant did not press upon any expert examination for the same to prove their case. Hence, the invoices raised against the accused remains unproved. Be that as it may, even if it is accepted on the face itself that CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 11 of 14 smart card were provided to accused by the complainant then also it does not even lead to inference that signals were provided by the complainant to accused. It is further noteworthy here that invoices filed by the complainant possess the date of issuance as 2012 however, it has been stated by the AR of the complainant himself that the signals were being provided from November, 2015.
Reasons for the decisions:-
13. In Kumar Exports V, Sharma Carpets (2009) 2 Supreme Court Cases 513, it is held "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 either 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 served the purpose of the accused. Something which isprobable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 12 of 14 circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue.
Therefore, on the basis of above discussed evidence and reasons, reasonable doubt is created on the case of the complainant as the accused has been able to raise a probable defence in his favour. In the present matter, DW-1 who is the accused has been able to withstand his defence therefore, the testimony of the accused seems to be reliable to this court which has made way to prove his non-existence of consideration or at least that it was unprobable or doubtful. Conclusion:-
14. Based on the defence taken by the accused and evidence led by the complainant and accused, this court has arrived to the conclusion that the accused CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 13 of 14 has raised a probable defence in his favour and the complainant failed to prove his case beyond reasonable doubt. Therefore, this court finds the accused Joginder Sharma not guilty for the offence punishable U/s 138 NI Act. Therefore, accused Joginder Sharma stands acquitted for the offence.
ANNOUNCED IN THE OPEN COURT ON 05.02.2024 (DEEPAKSHI RANA) MM-01 (N.I. ACT) Distt. South-East, Saket Court, Delhi [This judgment has been directly typed on computer to dictation] [This judgment contains 14 signed pages] CT No. 623996/2016 Hathway Cable Datacom Ltd V/s Joginder Sharma Etc p age 14 of 14