Delhi District Court
P.N. Mehrotra vs Vijay Israni on 24 August, 2024
IN THE COURT OF SH. VARUN CHANDRA,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT-04),
SAKET COURTS, NEW DELHI
CT Cases 1576/2014 463405/2016
P.N. MEHROTRA Vs. VIJAY ISRANI
P.N. Mehrotra,
S/o Late Sh. H.N. Mehrotra,
R/o C-49, Panchsheel Enclave,
New Delhi ............ Complainant
Vs.
Vijay Israni,
S-12, Green Park (Main),
New Delhi-110016 ............. Accused
1. Complainant : CT Cases 1576/2014 463405/2016
Case Number
DLST020005622014
2. Offence : Under Section 138 of the
complained Negotiable Instruments Act, 1881
proved
3. Plea of the : Pleaded not guilty
accused
4. Final Order : Acquitted
5. Date of : 24.02.2014
Institution
CT Cases 1576/2014 463405/2016
P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 1/27
6. Date on which : 29.07.2024
reserved for
Judgment
COMPLAINT UNDER SECTION 138 NEGOTIABLE INSTRUMENTS
ACT, 1881.
JUDGMENT
1. It is the case of the complainant that the accused is a builder by profession who approached the complainant to build his house and entered into a collaboration agreement dated 28.01.2010 with the complainant through his son Mr. Sunny Israni, Director of M/s Boutique Durable Homes Pvt. Ltd., a family concern of the accused. The same was to be completed by end of December, 2011. The same was extended to be completed by 30th Sept. 2012 by supplementary dated 27.01.2012 and further extended to be completed by 31-05-2013 vide supplementary dated 27.09.2012.
2. That the accused stood guarantor for the said deal and handed over a cheque no. 494654 dated 05.06.2013 for Rs. 25,00,000/- which was dishonoured when presented for payment. However, the complainant did not file the criminal case against the accused drawing a broader attitude. However, the specific performance guarantee was further renewed on dated 28.07.2013 by the accused and cheque bearing no. 449069 dated 15.11.2013 for Rs.25 lacs drawn on Axis Bank as full and final opportunity to the accused.
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3. It is the case of the complainant that the work could not be completed again by the said date and as per the terms of the agreement, the complainant had every right to encash the cheque issued by the accused despite sufficient opportunities provided to the accused and his family concern. The said cheque was issued by the accused after signing the same to the complainant with an assurance that the same would be honoured as and when presented in case the work was not completed by the aforesaid date.
4. That since the work was not completed again and the complainant was constrained to present the cheque for encashment; which infact was done after informing the same to the accused for his failure to perform the guarantee.
5. That to the greatest surprise the cheque was again dishonoured when presented for its payment through State Bank of India, 179 Masjid Moth, New Delhi, banker of the complainant, on dated 02.01.2014 with reason "Payment stopped by the Drawer".The complainant sent a statutory notice dated 09.01.2014 through advocate on dated 10.01.2014. Despite duly received, the accused did not pay the amount of cheque and had intentionally stopped its payment.
6. That the complainant immediately informed to the accused for the failure to fulfill the performance of guarantee rendered by him and not discharging the liability intentionally. But the same did not have any effect on the deaf ears of the accused. The conduct therefore of the accused inferred an intentional criminal perpetual fraud played on the CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 3/27 complainant.
7. It is the case of the complainant that the accused has acted dishonestly and fraudulently by issuing the said cheque knowing-fully well that the commitment not to be honoured, thus, rendered himself liable to be prosecuted u/s 138 N.I. Act as amended up to date.
8. In order to prove his case, the complainant had examined himself as CW-1 by way of affidavit Ex. CW-1/1 and relied upon the following documents:
Ex.CW-1/1 Evidence by way of affidavit
Ex.CW-1/A Third Supplementary agreement dated
28.07.2013
Ex.CW-1/B Cheque bearing no. 449069 dated
15.11.2023 for an amount of Rs.
25,00,000/-
Ex.CW-1/C Return memo dated 03.01.2014
Ex.CW-1/D Legal demand notice dated 09.01.2014
Ex.CW-1/E Postal receipts
Ex.CW-1/F Complaint u/s 138 NI Act.
9. After perusal of the complete complaint and the affidavit of evidence, sufficient material was found and summoning orders were passed against the accused under Section 204 Cr.PC Vide order dated 24.02.2014 by the Ld. Predecessor of the Court.
10. Thereafter vide order dated 21.06.2014, the notice u/s 251 Cr.PC was served upon the accused wherein it was stated by the accused that he has no liability towards the complainant. He stated that his son was CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 4/27 doing the construction of the property bearing no. C-49, Panchseel Enclave, New Delhi. He stated that the cheque was issued in favour of the complainant as security for possession of his portion on or before 15.11.2013. He stated that he took the possession on 27.11.2013 and the flat was ready before possession. He further stated that the cheque was not returned and he has no legal liability to pay the cheque amount to the complainant.
11. Thereafter, the legal representative of the complainant was partly examined in chief vide order dated 28.04.2016. The cross examination of the LR of the complainant was conducted vide order dated 12.07.2016, 11.08.2016, 21.02.2017 & 25.04.2017. Thereafter vide separate, CE was closed and matter was put up for recording of statement of accused under Section 313 Cr.PC.
12. Thereafter the statement of accused under Section 313 Cr.PC was recorded vide order dated 11.07.2017 wherein it is stated by the accused that time period agreement was extended because the scope of work got extended day by day. He stated that the cheque was given when the agreement was entered into to complete the work by 31.05.2013. He further stated that due to mutual understanding, the time was extended by agreement dated 28.07.2013 and therefore he had no liability to pay any amount for the cheque dated 05.06.2013. He further stated that he has no legal liability to pay the cheque amount because as per agreement, work was to be completed by 15.11.2013 and the work was already completed before 15.11.2013 i.e. well within time. He stated CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 5/27 that thereafter the complainant is under liability to make some payment to him. He stated that he has not received any legal demand notice.
13. Thereafter vide order dated 11.07.2017, the matter was put up for defence evidence. Vide order dated 14.03.2018, an application u/s 315 Cr.PC was moved on behalf of accused.
14. Vide order dated 14.03.2018, the accused stepped in the witness box as DW-1 and his examination of chief was conducted vide order dated 14.03.2018 and 02.05.2018. The cross examination of DW-1 was conducted vide order dated 24.07.2018, 13.02.2019 & 13.03.2019. The accused was discharged vide order dated 13.03.2019.
15. Thereafter vide order dated 22.08.2019, the witness namely Dal Chand, Record Keeper, Building Department, South Zone, Green Park, New Delhi had stepped in the witness box as DW-2 wherein he was examined in chief, cross examined and discharged.
16. Thereafter vide order dated 12.12.2019, witness namely Ranjeet Kumar and Sh. Jitin Pal Singh had stepped in the witness box and both had been examined in chief, cross examined and discharged.
17. Thereafter vide order dated 31.03.2022, the right to lead defence evidence was closed and subsequently the matter was put up for final arguments.
18. That an application under Section 311 Cr.PC for recalling of witness was moved on behalf of accused and vide order dated 14.09.2022, the CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 6/27 application under Section 311 Cr.PC was allowed.
19. Thereafter vide order dated 12.12.2023, another application under Section 311 Cr.PC was preferred. The same was dismissed by this Court. Thereafter, vide order dated 10.01.2024, an application under Section 311 Cr.PC was again moved on behalf of accused and the same was dismissed. Subsequently, the matter was put up for final arguments.
20. Vide order dated 20.04.2024, part arguments were heard in the present matter and the liberty was given to furnish written arguments. Thereafter, on 01.07.2024, written submissions was furnished on behalf complainant.
21. On 29.07.2024, arguments were heard extensively on behalf of accused and written arguments were furnished as well.
ARGUMENTS ADVANCED
22. Counsel for complainant argues that the accused is a builder by profession and approached the Complainant to build and develop his property and entered into a collaboration agreement dated 28.01.2010 (Ex. CW1/A1). He argues that the work was to be undertaken by the son of the accused Mr. Sunny Israni who is the Director of M/s Boutique Durable Homes Pvt. Ltd (the builder), which is a family concern of the accused. He submits that in terms of this agreement, the work was to be completed by the end of December 2011. However, as the builder failed to complete the work on time, the agreement came to be extended by Supplementary Agreement dated 27.01.2012 CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 7/27 (Ex.CW1/A2) to be completed by 30.09.2012.
23. Counsel for complainant argues that the builder further failed to complete the work and a Second Supplementary Agreement dated 27.09.2012 and Performance Guarantee (Ex. CW1/A3) came to be executed for completing the work by 31.05.2013. He submits that the accused stood as a guarantor and a cheque was handed over bearing no. 494654 dated 05.06.2013 for Rs.25 lakhs. He submits that as the work was not completed yet again, the Complainant presented the cheque which was dishonoured. He submits at the request of the accused, no case was filed by the Complainant. He further submits that a Third Supplementary Agreement dated 28.07.2013 with Performance Guarantee (Ex. CW1/A4) was then executed by the Complainant and the accused as a final opportunity to the accused to finish the work by 15.11.2013 and a cheque dated 15.11.2013 for Rs.25 lakhs, bearing No.449069 drawn on Axis Bank was issued by the accused.
24. Counsel for complainant argues that the accused stood as a guarantor. He submits that as the work was again not completed, the Complainant presented the cheque which was dishonoured for the reason "Payment Stopped by the Drawer" on 02.01.2014. He submits that the Complainant sent a statutory notice dated 09.01.2014 (Exh.CWI/D) to the accused, who despite receiving the same did not pay up. He submits that it is under these circumstances that the present complaint has come to be filed.
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25. Counsel for complainant submits that an appreciation of the oral evidence of the complainant is required. He argues that the cross examination of SPA of the complainant dated 25.04.2017, the SPA of complainant deposed as to the plans finalised by the architect and the plans given by the builder. The SPA of complainant further deposed that the plans given by the builder were completely different than the specifications contained in Ex. CWI/DI. SPA for complainant further deposed that to bringing the plans of the builder Ex. CW1/DI after he was asked by the counsel for the accused to bring the same during cross dated 21.02.2017. SPA for complainant further deposed that there was no house warming - there was a havan for marriage anniversary. He further deposed that as to the emails being Exh. CW1/G1 and CW1/G2 which were sent by his father - that reflect incomplete work. He further deposed that continuous work was going on.
26. Counsel for complainant argues that cross examination of SPA of complainant on 21.02.2017 he deposed that that cheque was not given as a security cheque. He deposed that it was infact given as a cheque for performance guarantee - in view of the Third Supplementary Agreement. Even with the Second Supplementary Agreement there was a cheque - so they knew it was their admitted liability. SPA for complainant further deposed that work was done beyond the schedule of specifications Exh. CW1/D1. He deposed that third Supplementary Agreement notes that any work done beyond the schedule was the liability of the builder to further increase the value of the property. SPA for complainant deposed that he then proceeds to list out the remaining CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 9/27 work and they moved into an incomplete home on 27.11.2013.
27. Counsel for complainant argues that the statement of accused under Section 313 was recorded on 11.07.2017 wherein he stated that an earlier cheque dated 05.06.2013 was dishonoured but no case was filed as the parties arrived at an understanding. The accused stated that thereafter the second cheque was issued in pursuance of third Suppl. Agreement dated 28.07.2013 - Cheque no. 449069 (dated 15.11.2013) on Axis Bank, Green Park. The accused says that he did not receive the legal notice.
28. Counsel for complainant argues that the cross examination of the accused was recorded on 24.07.2018 wherein he admits to delays and falsely states that terms leading to changes in specs were jointly requested. He submits that the accused denies receiving the email dt. 07.12.13 Ex.CW1/G1 which records incomplete work.
29. Counsel for complainant argues that the examination in chief of accused was recorded on 02.05.2018 and 14.03.2018 wherein he speaks of extra expenses made by him beyond the schedule of specifications Ex.CW1/D1. He argues that accused says complainant moved in or around 15.11.2013. He submits that there is no clarity on when he moved in and and he is simply making a guess. He argues that nothing has been placed on record to show when they moved on.
30. Counsel for complainant argues that cross of accused was recorded on 13.02.2019 and 13.03.2019 wherein he states that he is witness to the CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 10/27 3rd supplementary agreement, he has obtained completion certificate which is not exhibited. He submits that the accused submits that construction was complete on 05.06.2013, the date of completion certificate but 3d supplementary agreement is exhibited after this date which is 28.07.2013.
31. Counsel for complainant argues that accused is further unable to point out any communication that says that the Complainant demanded some or the other work to be done which led to the delay. He further submits that with respect to bills dated 13.02.2014 for automated switches, he says the demand was made after possession but is unable to point out anything from the record and gives a vague answer as to everything being a part of the record. He further submits that accused is clearly not in a position to resile from the undertaking in the 3rd supplementary agreement.
32. Counsel for complainant argues that the Complainant has established that there exists a legally enforceable debt or liability which the Accused must clear. He submits that the liability of the accused is contractual and arises out of a contingency that is, on the non- completion of the project by 15.11.2013. He submits that it is evident from the evidence on record that the construction was not over and the premises were not fully ready until March/April 2014. He argues that there is no doubt that the liability of the accused arises out of the contract of guarantee dated 28.07.2013 (Ex. CWI/A4), having guaranteed the completion of the work.
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33. Counsel for complainant argues that Exh.SW8/A shows that the proposal for home automation system was received as late as September 2013 from M/s Ezhomz Solutions. He submits that thereafter, the various invoices dated such as 13.11.2013 and 13.12.2014, show very clearly that installations of different items such as electrical fitments, dishwater and VRV air conditioner were taking place at different points of time around and much after 15.11.2013. He submits that the consolidated account statement of HDFC Bank shows that an amount of Rs.2,44,808/- was received by the M/s Ezhomz Solutions from the accused on 02.03.2015. He further submits that it is further submitted that it makes no difference if the Complainant moved in on 15.11.2013 or 27.11.2013 or any other date. He submits that the lynchpin of the case is whether the work in the house was complete on 15.11.2013 or not. He submits that the answer to this, respectfully, is in the negative. He submits that in any event, the accused was unable to establish when the Complainant moved into the new home, and further was unable to establish that the work was completed as on 15.11.2013.
34. Counsel for complainant argues that Exhibits CWI/D4 Colly show non- installation of various items in the bathrooms. He further submits that the emails dated 07.12.2013 (Exh.CW I/Gl) and 1.1.2014 (Exh. CWI/G) from the Complainant to the accused show that the work was not complete at all. He submits that none of these have been refuted by the accused.
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35. Counsel for complainant argues that not a single document has been placed on record to show that any communication was made between the Complainant and the accused whereby the Complainant asked the Accused to install any particular variety of product, leading to delays. He argues that the various agreements between the Complainant and the accused extending the timelines, and the various invoices/delivery notes are simply a reflection of the work not being completed on time on account of the builder. He submits that even in their evidence, neither Vijay Israni, nor Sunny Israni say if any request was made. He further argues that further, a plain look at the address of the accused in the Performance Guarantee dated 28.07.2013 and the address in the legal notice shows that they are the same. He argues that the accused has not been able to establish that he received the legal notice.
36. Counsel for complainant lastly argues that the accused has failed to discharge the burden of rebutting the presumption under Section 139 NI Act. He submits that the entire case set up by the accused is that the Complainant shifted into the property on or before 15.11.2013, because the same was complete. He submits that it is pertinent to note that the work went on even after legal notice was issued on 09.01.2014, as is clear from evidence placed on record by the accused himself, aside from the evidence of the Complainant. He further argues that it was not over until March 2014. He further submits that the defence of the accused does not hold up and the present Complaint deserves to be allowed.
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37. Per contra, Counsel for accused argues that the case of the complainant is that the accused, a builder by profession, entered into a Collaboration Agreement dated 28.1.2010. He argues that it has been alleged that work could not be completed in terms of the said agreement, therefore Supplementary Agreement Dt 27.1.2012 was executed. He submits that it has been alleged that work could not be completed in terms of the said agreement. He submits that Second Supplementary Agreement dated 27.9.2012 was executed. He further argues that the Performance guarantee Ex CW1/A3 was executed and work was to be completed by 31.5.2013. He submits that it has been alleged that work could not be completed in terms of the said agreement. He submits that the third Supplementary Agreement Dt 28.7.2013 was executed. He further submits that the accused is stated to have executed Specific performance guarantee Ex CW1/A4, work was to be completed by 15.11.2013 and possession was to be handed over.
38. Counsel for accused argues that the cheque in question bearing No 449069 dated 15.11.2013 for Rs. 25 Lakh was issued. He further submits that it has been alleged that work could not be completed and possession was not handed over by 15.11.2013. He further argues that the cheque in question Ex CWl/B, was presented on 2.1.2014 and it returned unpaid for " payment stopped by drawer" Return Memo is Ex CW1/C, Notice dt 09.01.2014 is stated to have been issued Ex CWl/D, Postal receipts Ex.CW-1/E. He further submits that the complainant also stated to have sent two mails dt 30.11.2013 Ex CW1/G1 and 1.1.2014 Ex CW1/G2.
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39. Counsel for accused argues that the defence of the accused in Nutshell is that the work had been completed by 15.11.2013 and the possession of the property handed over to the complainant. He further submits that it is also the defence that in fact extra work of more than 40 lakh beyond the work contemplated in the agreement had been done. He submits that there is no legally recoverable debt as the possession was already handed over.
40. Counsel for accused argues that during the pendency of the case, the complainant died and his son Alok Mehrotra was substituted and he was examined as CW1. He further argues that during cross examination the Schedule of specification of the agreement in terms of which the work was to be carried out was exhibited as CW1/D1. He argues that the Plauns Finalised by the Architect were exhibited as CW1/D2 and CW1/D3. He submits that the complainant on his own got exhibited Ex CW1/D4, though not called for. He stated that the complainant admitted having a Bar, which was not ordered.
41. Counsel for accused argues that message dated 31.12.2013 was admitted to have been sent but was not produced. He argues that he admitted that cheque in question was handed over with clear understanding that only if Boutique Durables, I.e the builder fails to comply with the agreement then only accused would be liable. He submits that he admitted no notice being issued to Boutique Durables. He further submits that he admitted that work was executed beyond schedule of specifications. He submits that he admitted Samsung CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 15/27 Dishwasher, VRV Air-conditioner, computerized lighting system, Separate lift for basement, proposal by Ezhomez Solutions, having been, instated, which were not part of schedule of specifications.
42. Counsel for accused argues that basically complainant admitted all the extra work done. He argues that the justification given is that it was done on his own by the accused to beautify the building. He submits that it is sought to be argued that the third Supplementary agreement takes care of the extra work done. He submits that assuming that the third Supplementary Agreement takes care of the extra work till that day, why would the accused spend another 20 Lakh on extra work when the cheque amount itself is 25 Lakh. He further submits that the accused has further paid compounding charges of Rs 11,83,000/- to MCD which is the liability of the complainant. He submits that there is no mail from July, 2013 to 30.11.2013, It is only after the work is completed, property handed over that the complainant starts creating evidence to somewhow appropriate the cheque of 25 Lakh.
43. Counsel for accused argues that the complainant has heavily relied upon the mail dated 01.01.2014. He argues that the bare perusal of the Mail on 01.01.2014 intended only to create a liability of 25 Lakhs over the accused, says as Area Mentioned Guest Room :- Clean Bathroom Tiles Professionally, the meaning of term professionally is however vauge and cleaning tiles is not job of the builder after almost two months of shifting. He further submits that Remove/ Fix Wire exposed in the shower; a Install Exhaust mentioning a Minor item like exhaust is a CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 16/27 mere attempt to set up the case. He further submits that Bar-Install TV where wire is exposed, TV Installation is job of some other person and not covered in builder's scope.
44. Counsel for accused argues that items such as repair of wall paper hole next to switch is ridiculous in nature; Drawing Room :- Unknown Wire poking out of the wall. Temple:- Wall Treatment - guaranteed by you to be completed by 30 December 2013; that "Treatment is After Sale Service or Building Completion Scope". He submits that Install the Temple - Beyond Scope of Work. He further submits that Middle Room
- Seal and install steam unit- Beyond Schedule of Specifications; just Inserted to create a case and establish any sort of delay. He submits that finish at the top and cover the hole above the exhaust.- again being not of substance. He further submits that Powder Room :- Sicis Wall on the left wall. Finish Walls. - Sicis Wall Out of Scope of Specifications. He submits that fix the tilt on the cabinet - After sales service in nature.
45. Counsel for accused argues that Mummy's room - Install bathtub - only item being picked from the specifications whereas it was clearly mentioned "if required by the owners"; it was never required as they always cited their old age and injuries created due to bath tubs and opted for simple shower area with shower door as mentioned in the very next, i.e. line-seal space on shower door being a service item. Remove Wire Below the TV- Not Substantive work in nature.
46. Counsel for accused argues that Main Entry Upstairs - Fix Wall Paper above the entry stairway is After Sales In Nature that finish Panels on CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 17/27 front main door, that sitting area downstairs - Install Three Doors is Out of Scope of Specifications. He further argues that Fix Sealant is after sales in nature; frost the glass Walls & Remove Garbage; Builder is not a recycling agency. He further argues that item main entrance area - Enclose Area and cover walls; illegal to cover any area in Stilts Building as Bye Laws Never permit.
47. Counsel for accused argues that item Basement & Stilt :- All the 13 items are entered for greed of more and more to be get done by the builder or in the alternative would aid in setting up the present case.
48. Counsel for accused argues that the mail was sent on 01-01-2014 was sent on 10:58 AM and immediately the Cheque was banked the next day being 02-01-2014 purely describes that pure motive and attempt was to extract more some of Rs 25,00,000/- by abusing Section NI 138 and even the notice sent by your lawyer is silent on the E-mail date and time as on the face of it would look like planned formulation of complaint by the complainant is clear foul play and then contrary statements in Notice are made in Para 4 - " My Client with honest intentions had at no point of time any intention to invoke your admitted liability".
49. Counsel for accused argues that also at Page 10 where a document is attached claiming it to be performance guarantee on which this case is set up. He argues that the Basic cheque Number is has material alteration. He submit states that whether the same can be a admissible document on which a liability can even be sustained is questionable. He CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 18/27 argues that the Owner shifted much earlier as rental was always paid by M/s Boutique Durable Homes Private Limited and they never paid rental of November 2013. He further argues that in defence accused examined himself. He stated that nothing could be extracted from him and the other witnesses were examined to prove the extra work. He submits that nothing substantial is extracted from them.
50. Counsel for accused argues that the case set up is false case, with the sole aim of extorting more money from the accused. He argues that the case of the complainant stands demolished and the the accused has been able to prove his defence and rebutted the presumption against him. He thereby prays that the present complaint be dismissed.
51. It is pertinent to mention that to establish the offence under Section 138 of the NI Act against the accused, the complainant must prove the following ingredients reiterated in the Judgment of Hon'ble Supreme Court of India in Kusum Ingots and Alloys v. Pennar Peterson Securities Ltd. AIR 2000 SC954:-
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
(ii) that cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier;
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(iii) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) 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 the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(v)the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;
52. The accused in the present matter has accepted the issuance of cheque as well as signatures on the cheque and thereby the presumptions u/s 118 and Section 139 NI Act are applicable in the present matter.
53. The Honorable Supreme Court of India in "Triyambak S Hegde v Sripad" (2022) 1 SCC 742 while relying upon the the constitution bench judgment of Basalingappa v Mudibasappa (2019) 5 SCC 418, under para 14 of its judgment reiterated that once the cheque was issued and that the signatures are upon the cheque are accepted by the accused, the presumptions under section 118(a) and section 139 of the NI Act arise against the accused. That is, unless the contrary is proved, CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 20/27 it shall be presumed that the cheques in question were drawn by the accused for a consideration and that the complainant had received the cheque in question in discharge of debt/liability from the accused.:
"25.1. 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.
25.2. 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.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the 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.
25.4. 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.
54. Further, The Honorable Supreme Court of India in "Rakesh Jain v. Ajay Singh" Crl. No. 12802 of 2022 has held under para 44 that:
"44. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the same time, the accused may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling the burden may likewise shift to the CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 21/27 complainant. It is open for him to also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. The burden of proof may shift by presumptions of law or fact. In Kundanlal's case- (supra) when the creditor had failed to produce his account books, this Court raised a presumption of fact under Section 114, that the evidence, if produced would have shown the non-existence of consideration. Though, in that case, this Court was dealing with the presumptive clause in Section 118 NI Act, since the nature of the presumptive clauses in Section 118 and 139 is the same, the analogy can be extended and applied in the context of Section 139 as well."
And further held under para 56 that;
"56. At the stage when the courts concluded that the signature had been admitted, the Court ought to have inquired into either of the two questions (depending on the method in which accused has chosen to rebut the presumption): Has the accused led any defense evidence to prove and conclusively establish that there existed no debt/liability at the time of issuance of cheque? In the absence of rebuttal evidence being led the inquiry would entail: Has the accused proved the nonexistence of debt/liability by a preponderance of probabilities by referring to the 'particular circumstances of the case'?"
55. Now the defence taken by the accused to rebut the presumptions under Section 118 and 139 of NI Act will be looked into.
56. The accused has denied the legally enforceable liability in its entirety by stating that the possession of the property i.e. C-49, Panchsheel Vihar was provided to the complainant well within the time period. He CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 22/27 has further alleged that the items have been installed in the stated property above the specifications and thereby it is the complainant who has to reimburse the accused. He has further alleged that the compounding fees of Rs. 11,81,863/- to the MCD reflects that the completion certificate was granted and the property was handed over in due time.
57. The point of contention is raised from the third supplementary agreement made between the complainant and the builder company i.e. M/s Boutique Durable Homes Pvt Ltd wherein the date of completion was extended from 01.06.2013 till 15.06.2013 wherein it had been mentioned that the accused had given a guarantee dated 28.07.2013; and that the penalty was not being applied till 15.11.2013 upon the builder company. The third supplementary agreement entailed a performance guarantee signed by the accused dated 28.07.2013 that the builder will complete the entire project on or before 15.11.2013 and handover possession of their part to the owner and that he stood as a guarantor in discharge of the same and handed over a post dated cheque of Rs. 25 Lakhs dated 15.11.2013.
58. The liability of the guarantor is co-extensive as specified under Section 128 of the Indian Contract Act and when r/w Section 138 NI Act, 1881 it can be stated that the term "legally enforceable liability" would include in its ambit the responsibility of a guarantor in a given contract.
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59. Perusal of the record reflects that the completion certificate had been issued by the Municipal Corporation Delhi dated 05.06.2013 wherein the premises were inspected and declared to be habitable. The accused has also claimed that the compounding fees of Rs. 11,81,863/- had been paid by him for the necessary completion certificate.
60. While the complainant claims that the possession was not handed over on 15.11.2013 due to the specifications as per the third supplementary agreement not being met, the specifications has to be matched with those filed at the time of cross examination wherein the complainant had furnished the same from the initial plan.
61. It has been accepted by the complainant himself in his cross examination that it would be difficult to track the list of materials installed v specified, however, the items that were not installed or completed had been attached as an Exhibit.
Ex.CW1/D1 - Schedule of specifications state the quality of work in its substantive form expected from the builder company in the civil work, wood work, floorings, ceilings, kitchen, bathroom & electric work etc. The specifications state that in the section of bathrooms that different batrooms shall have different schemes as per the owner's preference.
Moreover, vide email dated 30.11.2013 i.e. Ex.CW-1/G1, a separate list of specifications were added by the complainant wherein items to be completed by 30.11.2013; 06.12.2013 & 12.12.2013 were CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 24/27 mentioned. The email dated 01.01.2014 i.e. Ex.CW-1/G2 state that complainant moved in the house on 27.11.2013. The separate list of specifications vide Ex.CW-1/G1 impliedly extended the time period of completion of work available to the builder company.
Section 135 of the Indian Contract Act, 1872 states that surety is discharged of his liability in the event the creditor promises to give time to the principal debtor.
62. At the time of cross examination of complainant it was accepted by him that certain items were installed by the accused, however, they were done so on his own volition. It is difficult to understand that when the accused knew that the sword of default liability of Rs. 25 Lakhs is hanging on his head, he chooses to install a Bar, dishwasher, a separate lift for the basement to the ground floor, etc. on his own volition. This act of extending the time period himself and over performing from what is expected from him is difficult to understand and the contention of the complainant regarding the same does not hold ground.
63. The claim of the accused that the mail dated 01.01.2014 is being heavily relied upon the complainant solely to create a cause of action against the accused as particular items mentioned in the stated mail do not fall within the ambit of the builder once the complainant had moved in is understandable.
64. The fact that the complainant is unaware of the issuance of a completion certificate of his own property which is in dispute and is CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 25/27 being eagerly awaited by him to be completed and taken possession off cannot be accepted.
The complainant in his complaint had stated that the contract of building of the stated property was made with the accused through the Builder company, however, perusal of the record reflect that all the agreements were made between the complainant and M/s Boutique Durable Homes Pvt Ltd and the accused was not present in the stated agreement even as a witness. The fact that the complainant has accepted that no complaint of any sort has been sought against the builder company also weakens the veracity of the claim of the complainant.
65. The documents Ex.CW-1/D2, Ex.CW-1/D3 & Ex.CW-1/D4 are all documents made against the specifications of the complainant and are not made against the sanctioned plan upon which the completion certificate was granted. The fact that the completion certificate had been issued by the MCD in June, 2013 reflects that the area was declared as habitable by a Government Authority.
The issue pertaining to the legally enforceable liability in the present matter arises from the fact that the stated property was not handed over to the complainant on 15.11.2013. However, the issuance of the above mentioned certificate furnished by the accused alongwith the act of extenstion of time by the complainant for completion of work by the builder company raises a probable defence in his favour and thereby CT Cases 1576/2014 463405/2016 P.N. MEHROTRA Vs. VIJAY ISRANI PAGE NO. 26/27 the presumptions available to the complainant under Section 118 and 139 NI Act have been rebutted by him.
66. In view of the above findings and analysis, it is concluded that the accused has successfully rebutted the mandatory presumptions under section 118 and 139 of the NI Act and the ingredients of offence under Section 138 Negotiable Instruments Act has not been fulfilled by the complainant beyond reasonable doubt.
67. Consequently, the accused Vijay Israni is held not guilty and is hereby acquitted of the offence under section 138 of the Negotiable Instruments Act, 1881.
Certified that this Judgment contains 27 pages and each page bears my signature.
Digitally
signed by
VARUN
VARUN CHANDRA
CHANDRA Date:
2024.08.24
17:33:27
+0530
Pronounced in open Court (Varun Chandra)
on 24.08.2024 JMFC (NI Act)-04/Saket Courts,
South/New Delhi
CT Cases 1576/2014 463405/2016
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