Delhi District Court
CT CASES/624489/2016 on 29 November, 2022
Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016
IN THE COURT OF MS. TWINKLE CHAWLA: MM, NI ACT-02, SOUTH-EAST
DISTRICT, SAKET COURTS COMPLEX: NEW DELHI
Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : DLSE020059212015
2. Name of the Complainant : Intec Capital Ltd.
3. Name of the Accused, : Accused No. 1: Alka Fabrics Pvt. Ltd.
parentage & residential
address Accused No. 2: Rajeev Gupta, Director, Alka
Fabrics Pvt. Ltd.
Accused No. 3: Alka Gupta (Not Summoned
in the present case)
All at: 454, 1st Floor, Haveli Haider Quili,
Chandni Chowk, Delhi
4. Offence complained of or : U/s 25 Payment and Settlement Systems Act,
proved 2007
5. Plea of the Accused : Accused No. 1: Pleaded not guilty and
claimed trial
Accused No. 2: Pleaded not guilty and
claimed trial
6. Final Judgment/order : Accused No. 1: CONVICTED
Accused No. 2: CONVICTED
7. Date of judgment/order : 29.11.2022
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JUDGMENT
1. The Complainant has filed the present complaint under Section 25 of the Payment and Settlement Systems Act, 2007 ("PASA Act") against the Accused persons on the averments that the Complainant, being a non-banking finance company, had advanced a loan facility of Rs. 35,00,000/- to the Accused No. 1 Company, under loan agreement No. 6324. The said loan was to be repaid with interest in 36 monthly equated installments of Rs. 1,27,431/- each. It has further been stated that the Accused No. 1 company opted for payment through ECS mandate and accordingly, issued standing instruction to its banker namely Canara Bank, Maharani Bagh, New Delhi bearing MICR Code-110015021 to debit a sum of Rs. 1,27,431/- from the account of the Accused No. 1 Company, bearing No. 0349214000013 towards the monthly installments in respect of dues and liabilities under the above-mentioned loan agreement and correspondingly to credit the said account, in the bank account of the Complainant, i.e., HDFC Bank, Delhi. Copy of mandate form issued by the Accused is Ex. CW1/C.
2. The said mandate was to be effective from 16.02.2015 to 16.07.2017. Further, it has been stated that after the initiation of the ECS by the Accused, in respect of the equated monthly installment amounting to Rs. 1,27,431/- for the month of April 2015, the same could not be executed on the grounds of "Insufficient Balance" and the intimation of dishonour of the ECS was received by the Complainant vide transaction returning memo dated 16.04.2015, sequence No. 2077110022 issued by HDFC Bank, Delhi; which is duly registered with the RBI for ECS-debit clearing as a user institution. Returning memo of ECS transaction is Ex. CW1/D. Page 2 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
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3. Further, a legal notice dated 14.05.2015 was sent to the Accused at his registered address through speed post by the Complainant on 15.05.2015. Copy of legal notice is Ex. CW1/E, speed post receipt as Ex. CW1/F (Colly) and tracking report as Ex. CW1/G (Colly) and evidence by way of affidavit is Ex. CW1/X. Hence, despite the receipt of the legal demand notice, no payment was made by the Accused and accordingly, the present complaint has been filed.
4. The Complainant Company examined its AR namely Love Kumar as part of pre-
summoning evidence. He tendered his evidence affidavit, Ex. CW1/X and also proved the following documents:
Ex. CW 1/A Copy of board resolution dated 07.02.2014 passed by the (OSR) Complainant Company.
Ex. CW1/B (OSR) Copy of letter of authority issued by the Complainant Company in favour of the AR dated 17.09.2015.
Ex. CW1/C Copy of mandate form issued by the Accused No. 1 company.
Ex. CW1/D Copy of the return memo in respect of the ECS transaction. Ex. CW1/E Copy of legal demand notice dated 14.05.2015.
Ex. CW1/F Copy of the tracking report in respect of the legal demand notice.
Ex. CW1/G Tracking report in respect of the legal demand notice.
5. After taking pre-summoning evidence, Accused No. 1 and Accused No. 2 were ordered to be summoned in this case for commission of offence U/s 25 PASA Act, 2007, vide order dated 04.07.2015. No case was found to be made out against Accused No. 3 and she was not summoned.
6. Accused No. 2 appeared and was released on bail on 08.12.2016. On finding a prima facie Page 3 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016case, notice U/s 251 of the Criminal Procedure Code, 1973 ("CrPC") was served upon the Accused No. 1 through Accused No. 2; and on Accused No. 2, on 09.08.2019 to which they pleaded not guilty and opted to contest after disclosing the following defence:
"I want to pay the Complainant but I need some time for payment and matter may be referred to mediation. I admit the liability of the mandate in absolute terms. The statement is made voluntarily in a sound state of mind."
7. No application u/s. 145(2) NI Act was moved by the Accused despite opportunity and hence, the right to file application u/s 145(2) NI Act was closed vide court order dated 09.05.2022. The statement of Accused u/s 313 CrPC was recorded on 09.05.2022, wherein the Accused persons opted to lead defence evidence.
8. As part of defence evidence, the Accused No. 2 was examined as DW-1; and Ahlmad of Court No. 609, South-East District, Sh. Himanshu Randhawa was examined as DW-2. DW-2, brought on record as Ex. DW2/A (Colly) and Ex. DW2/B (Colly), the certified copies of complaint, documents, statement of witnesses and judgment in CC No. 620154/2016; and CC No. 618463/2016, respectively.
9. Defence evidence was closed vide order of Court, at the request of Ld. Counsel for the Accused on 29.07.2022.
10. I have heard Ld. Counsel for the parties and have perused the case file carefully and meticulously.
Submissions of the Complainant and Accused
11. The Ld. Counsel for the Complainant has submitted that all ingredients of Section 25 Page 4 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016PASA Act, 2007 are fulfilled in the present case and hence, the presumption arises in the favour of the Complainant, which has not been successfully rebutted by the Accused.
12. Per contra, Ld. Counsel for the Accused has submitted that the Accused deserves to be acquitted as Accused No. 2 has already been convicted for the offence u/s 138 NI Act in CC No. 620154/2016, in a complaint filed by the Complainant itself, in respect of the same loan account; and hence, the present trial is barred in light of Section 300 CrPC, i.e., double jeopardy. Hence, as per the Ld. Counsel for the Accused, the Accused has rebutted the presumption by way of preponderance of probabilities. Ingredients of offence u/s 25 PASA:
13. In order to establish the offence under Section 25 of PASA Act, the Complainant has to fulfill all the essential ingredients of the said offence.
14. Section 25 of the PASA Act reads as follows:
"Dishonour of Electronic Funds Transfer for insufficiency, etc., of funds in the account: (1) Where an electronic funds transfer initiated by a person from an account maintained by him cannot be executed on the ground that the amount of money standing to the credit of that account is insufficient to honour the transfer instruction or that it exceeds the amount arranged to be paid from that account by an agreement made with a bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the electronic funds transfer, or with both: Provided that nothing contained in this section shall apply unless:
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(a) the electronic funds transfer was initiated for payment of any amount of money to another person for the discharge, in whole or in part, of any debt on other liability;
(b) the electronic funds transfer was initiated in accordance with the relevant procedural guidelines issued by the system provider;
(c) the beneficiary makes a demand for the payment of the said amount of money by giving a notice in writing to the person initiating the electronic funds transfer within thirty days of the receipt of information by him from the bank concerned regarding the dishonour of the electronic funds transfer; and
(d) the person initiating the electronic funds transfer fails to make the payment of the said money to the beneficiary within fifteen days of the receipt of the said notice. (2) It shall be presumed, unless the contrary is proved, that the electronic funds transfer was initiated for the discharge, in whole or in part, of any debt or other liability. (3) It shall not be a defence in a prosecution for an offence under sub-section (1) that the person, who initiated the electronic funds transfer through an instruction, authorization, order or agreement, did not have reason to believe at the time of such instruction, authorization, order or agreement that the credit of his account is insufficient to effect the electronic funds transfer.
(4) The Court shall, in respect of every proceeding under this section, on production of a communication from the bank denoting the dishonour of electronic funds transfer, presume the fact of dishonour of such electronic funds transfer, unless and until such fact is disproved.
(5) The provisions of Chapter XVII of the Negotiable Instruments Act, 1881 (26 of 1881) shall apply to the dishonour of electronic funds transfer to the extent the circumstances admit.Page 6 of 20
Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016Explanation:
For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability, as the case may be."
15. Further, the term "electronic funds transfer" has been defined u/s 2(c) of PASA as: "any transfer of funds which is initiated by a person by way of instruction, authorization or order to a bank to debit or credit an account maintained with that bank through electronic means and includes point of sale transfers; automated teller machine transactions, direct deposits or withdrawal of funds, transfers initiated by telephone, Internet and, card payment."
16. It is pertinent to note that Section 25(5) attracts the applicability of Chapter XVII of the Negotiable Instruments Act, 1881 ("NI Act") to the dishonoring of an electronic funds transfer. Section 138 of the NI Act expressively provides provisions concerning the penalization of dishonored cheques. Both these sections make the dishonoring of electronic funds and cheques and offence punishable with imprisonment, fine or both. The prime difference between the two is that in the case of the former, the dishonor, which is the subject matter of the offence, is of electronic funds transfer rather than of a cheque.
17. Further, the Hon'ble Delhi High Court in the case of Ritu Jain v. The State through Standing Counsel & Anr. (Crl. M. C No. 555/2016; date of decision 12.03.2019), observed that by virtue of Section 25(5) of the Payments and Settlement Act, the provisions of Chapter XVII of the Negotiable Instruments Act, 1881 (26 of 1881) shall apply to the dishonor of an electronic funds transfer to the extent the circumstances admit.
18. Hence, once the Accused has admitted that he has issued ECS Mandate, which relates to the Accused; an initial presumption as contemplated u/s 139 NI Act has to be raised by the court in favor of the Complainant. Section 139 of the NI Act contemplates that it shall be Page 7 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016presumed unless contrary is proved that the holder of the ECS received the same for the discharge of the whole or in part any debt or liability.
Presumption under Section 139 NI Act/Section 118 NI Act:
19. Section 139 NI Act states that:
"Presumption in favour of holder: 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, of any debt or other liability"
20. Section 139 NI Act is a type of reverse onus clause, which stipulates a presumption in the favour of the Complainant as to fact of a cheque being received in discharge of a legal debt or liability.
21. Further, Section 118(a) of the NI Act, states as follows:
22. "Presumptions as to negotiable instruments. -- Until the contrary is proved, the following presumptions shall be made:
a of consideration --that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;"
23. The Hon'ble Supreme Court of India has in a number of judgments dealt with the combined effect of the presumptions raised under Section 139 and Section 118(a) NI Act. The following proposition can be summarized on a perusal of the judgments of the Hon'ble Supreme Court of India in Sunil Todi & Ors v. State of Gujarat, LL 2021 SC Page 8 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016706, Kalamani Tex v. P. Balasubramanian, 2021 SCC OnLine SC 75; APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers and Ors., AIR 2020 SC 945; Rohitbhai Jivanlal Patel v. State of Gujarat and Ors., AIR 2019 SC 1876; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; K.N. Beena v. Muniyappan and Anr., (2001) 8 SCC 458; and Dhanvantrai Balwantrai Desai v. State of Maharashtra, 1964 Cri. LJ 437:
(i) Once the execution of cheque/ECS mandate is admitted; Section 139 of the NI Act mandates a presumption that the cheque/ECS was for the discharge of legally enforceable debt or liability;
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the Accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities;
(iii) Something which is probable has to be brought on record by the Accused 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 circumstances of the case, act upon the plea that they did not exist;
(iv) The words "unless the contrary is proved" which occur in Section 139, make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence Page 9 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.CC No.624489/2016
is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by Section 139 NI Act cannot be said to be rebutted;
(v) 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;
(vi) That it is not necessary for the Accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
Analysis
24. In the case at hand, it is not in dispute that the ECS mandate was issued by the Accused No. 1 Company from the bank account of the said company; as the same has been admitted by the Accused No. 2 in his statement u/s. 294 CrPC. Further, it is also not in dispute that the Accused No. 2 is the signatory of the ECS mandate as he has duly admitted the same in his statement u/s. 294 CrPC. The dishonor of the ECS for the month of April 2015 on grounds of insufficient balance is also not in dispute, having been admitted by the Accused No. 2 in statement u/s. 294 CrPC.
25. The receipt of the legal demand notice has also been admitted by the Accused No. 2 in his statement U/s. 294 CrPC.
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26. Thus, the legal demand notice Ex. CW1/E is held to have been duly served upon the Accused. Finally, the complaint has been filed within the limitation period. Therefore, essential ingredients as stipulated above, have been duly satisfied.
27. Further, as noted above, once the execution of the ECS mandate by the Accused is proved/admitted, the presumption of the same being drawn for consideration stands attracted. Accordingly, it is required to be presumed that the ECS mandate was issued for consideration in favour of the Complainant in discharge of an existing debt. The onus, therefore, shifts on the Accused to establish a probable defence so as to rebut such a presumption.
28. In the segment on legal framework, set out above, the legal proposition with respect to the burden of proof upon the Accused has already been discussed. Hence, it is now to be examined as to whether the Accused brought any material on record or pointed out glaring discrepancies in the material produced by the Complainant for dislodging the presumption which meets the standard of preponderance of probabilities.
29. The Accused persons in the present case have taken the defence that Accused No. 2, Sh.
Rajeev Gupta and another director of Accused No. 1 company, Ms. Alka Gupta, have already been convicted under Section 138, NI Act for the dishonour of cheques given by them as security, to the Complainant, vide judgment dated 21.01.2022 by Ld. MM- 09/SED; and have also been sentenced vide order dated 19.02.2022. Further, it has been submitted that the amount of the aforesaid cheque, includes within it, the amount of the EMI installment for the month of April 2015; which is the impugned ECS in the present case. Accordingly, the trial of the present complaint is barred by the provisions of double Page 11 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016jeopardy under Section 300 CrPC.
30. It is seen that the rule against double jeopardy provides foundation for the plea of autrefois acquit and autrefois convict. The manifestation of this rule is to be found primarily in Section 300 CrPC.
31. Section 300(1) CrPC reads as follows:
"A person who has once been tried by a Court of competent jurisdiction for an offence and convicted or acquitted of such offence shall, while such conviction or acquittal remains in force, not be liable to be tried again for the same offence, nor on the same facts for any other offence for which a different charge from the one made against him might have been made under sub-section (1) of Section 221, or for which he might have been convicted under sub-section (2) thereof."
32. Perusal of the aforesaid section shows that the first essential for the application of the aforesaid bar, is that the same person should be the subject of two trials. However, it is seen that while the Accused in CC No. 620154/2016 was Sh. Rajeev Gupta; and in CC No. 618463/2016 was Mrs. Alka Gupta; the Accused persons in the present case are the company, Alka Fabrics Pvt. Ltd. and Sh. Rajeev Gupta.
33. Moreover, the principal Accused is the company, namely, Alka Fabrics Pvt. Ltd. and Accused No. 2, Sh. Rajeev Gupta, is an Accused by virtue of vicarious liability of director u/s 25 PASA r/w 141 NI Act. However, in the complaints u/s 138 NI Act for the dishonour of the security cheque, the Accused persons were Sh. Rajeev Gupta and Ms. Alka Gupta, in their personal capacity as guarantors.
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34. It is a well settled law that a company has distinct legal personality and is an artificial person in the eyes of law. The Hon'ble Supreme Court in Raghu Lakshminarayanan v. M/S. Fine Tubes, (2007) 5 SCC, has observed that:
"A juristic person can be a Company within the meaning of the provisions of the Companies Act, 1956 or a partnership within the meaning of the provisions of the Indian Partnership Act, 1932 or an association of persons which ordinarily would mean a body of persons which is not incorporated under any statute."
35. Further, the drawer of the ECS mandate in the present case, i.e., the principal offender is Alka Fabrics Pvt. Ltd., i.e., a company; while the drawer of the cheque in CC No. 620154/2016, was Sh. Rajeev Gupta; in CC No. 618463/2016 was Ms. Alka Gupta. Hence, the "person" in the present complaint and in the other two complaints, are different. Accordingly, the bar of Section 300 CrPC is not applicable, even prima facie, to the trial of Accused No. 1, i.e., Alka Fabrics Pvt. Ltd., in the present complaint.
36. With respect to Accused No. 2, Sh. Rajeev Gupta, it is seen that while he was the Accused, who was convicted in CC No. 620154/2016, however, the capacity in which the said Accused person was convicted in CC No. 620154/2016; and the one for which, he is being tried in the present complaint is different. In the present complaint, the liability of Accused No. 2 is under Section 141 NI Act, i.e., vicarious liability. However, in CC No. 620154/2016, the liability of the Accused Rajeev Gupta was his direct liability being the drawer of the cheque in question in the said complaint.
37. In Aneeta Hada v. Godfather Travels and Tours Private Ltd., (2012) 5 SCC 661, the Hon'ble Supreme Court had described the nature of liability u/s 141 NI Act, in the Page 13 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016following terms:
"The said provision clearly stipulates that when a person which is a company commits an offence, then certain categories of persons in charge as well as the company would be deemed to be liable for the offences under Section 138. Thus, the statutory intendment is absolutely plain.
26. As is perceptible, the provision makes the functionaries and the companies to be liable and that is by deeming fiction. A deeming fiction has its own signification..... It is to be borne in mind that Section 141 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company."
38. Further, in Dilip Hariramani v. Bank of Baroda, the Hon'ble Supreme Court has observed that:
"The provisions of Section 141 impose vicarious liability by deeming fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal Accused, the persons mentioned in sub-section (1) or (2) would not be liable and convicted as vicariously liable."
39. Accordingly, unlike the proceeding u/s 138 NI Act, where the liability of the Accused No. 2 was on a principal basis; in the present proceedings, the nature and basis of the liability of Accused No. 2 is vicarious.
40. In the case of State of Bombay v. S.L. Apte, AIR 1961 SC 578, the Hon'ble Supreme Page 14 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016Court, while dealing with the issue of double jeopardy under Article 20(2) of Constitution of India, held as follows:
"13. To operate as a bar the second prosecution and the consequential punishment thereunder, must be for 'the same offence'. The crucial requirement therefore for attracting the article is that the offences are the same i.e. they should be identical. If, however, the two offences are distinct, then notwithstanding that the allegations of facts in the two complaints might be substantially similar, the benefit of the ban cannot be invoked. It is, therefore, necessary to analyse and compare not the allegations in the two complaints but the ingredients of the two offences and see whether their identity is made out."
41. In view of the above, the law is well settled that in order to attract the provisions of Article 20(2) of the Constitution i.e., doctrine of autrefois acquit or Section 300 CrPC or Section 71 IPC or Section 26 of General Clauses Act, ingredients of the offences in the earlier case as well as in the latter case must be the same and not different.
42. In the present case, not only are the offences distinct, to the extent that an essential ingredient of the offence u/s 138 NI Act is that there must be a cheque which is drawn on the bank account maintained by the drawer and the said cheque must have dishonoured; the essential ingredient of the offence u/s 25(1) PASA Act is that there must be an electronic funds transfer initiated by the drawer from a bank account maintained by him and the same should have been dishonoured; but even the facts of the two cases are distinct.
43. For the purpose of ease of reference, the differences are set out in tabular form: Page 15 of 20
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CC No.624489/2016 Point of Distinction Complaint against Complaint against Conclusion Rajeev Gupta u/s Rajeev Gupta u/s 138 NI Act in CC No. PASA Act in the 620154/2016 present complaint Nature of Cheque ECS The primary and instrument essential ingredient of the two offences is distinct. Drawer of Rajeev Gupta Alka Fabrics Pvt Ltd The drawer of instrument the instrument is distinct, as a company has a separate juristic personality from its directors. Basis of liability or Deed of guarantee, as Loan agreement, Ex. The document debt Rajeev Gupta stood DW1/X1 (OSR), as from which the as guarantee for the Alka Fabrics Pvt. liability under loan given to Alka Ltd. was the the two Fabrics Pvt. Ltd. principal borrower, complaints has to whom the loan in been alleged and question was the nature of advanced liability is also distinct. Reason for which Guarantee cheque Payment of EMI for The purpose of the instrument was given by the the month of April issuance of the issued Guarantor, to cover 2015 two instruments the situation where is also distinct. the principal borrower is unable to repay the loan Basis of liability of Drawer of the cheque, Director and The nature of Sh. Rajeev Gupta i.e., Primary Liability Authorised liability is Signatory of distinct. Accused No. 1 Company, i.e., Alka Page 16 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd. CC No.624489/2016 Fabrics Pvt. Ltd.; i.e., Vicarious Liability Primary Ingredient That he was the That he was in The ingredient required to prove drawer of the cheque charge of the day-to- required to be the liability of in question. day affairs of the proved for the Rajeev Gupta Accused No. 1 offence, is also company, i.e., Alka distinct. Fabrics Pvt. Ltd. Bank account on Personal account of Bank Account of This is a crucial which the Rajeev Gupta Alka Fabrics Pvt. fact as the instrument was Ltd. liability is of the drawn person, on whose bank account, the said instrument is drawn.
44. Further, even the Accused No. 2 in his cross-examination dated 27.06.2022, has admitted that "it is correct that the aforesaid mentioned case where I have been convicted was filed against me, due to fact of me standing as personal guarantor to the loan advanced to Accused No. 1 company and the basis of liability in that case was the deed of guarantee.
It is correct that the present case has been filed against Accused No.1 company, being principal borrower and the basis of liability is the loan agreement." Accordingly, in light of this admission and the discussion in the table above, since the ingredients of the offence and the facts constituting the said ingredients are distinct, the trial of Accused No. 2 in the present complaint, is also not barred by the provisions of Section 300 CrPC.
45. In the present case, the fact that a loan of Rs. 35,00,000/- was given by the Complainant to the Accused, to be repaid in 36 monthly equated installments of Rs. 1,27,431/- each is Page 17 of 20 Intec Capital Ltd. v. Alka Fabrics Pvt. Ltd.
CC No.624489/2016not in dispute and the fact that the Accused No. 1 company opted for payment of EMIs through ECS mode is also not in dispute. The Accused had admitted that the ECS mandate was effective for 36 months on a monthly basis, for an amount of Rs. 1,27,431/-; in his statement u/s 294 CrPC. The fact that the installment for the month of April 2015 was dishonored is also not in dispute; and that the said amount has not been paid by the Accused is also undisputed. In fact, in his cross-examination dated 27.06.2022, the Accused No. 2 has stated that "it is correct that I have not made the payment of ECS for the month of April 2015 despite the receiving of notice." The defence of the Accused as to double jeopardy has already been dealt with and dismissed above. Apart from the said defence, no other defence has been put forth by the Accused.
46. The AR of the Complainant has not been cross-examined by the Accused and no defence evidence on any point other than plea of double jeopardy has been led. It is clear that while the presumption u/s 139 NI Act is rebuttable in nature, a mere denial of liability is not sufficient to rebut the said presumption and a probable doubt has to be raised by the Accused (reliance placed on Kumar Exports Case (supra)). Hence, where the Accused neither raises a probable defence nor is able to contest the existence of a legally enforceable debt or liability, the presumption cannot be said to be rebutted.
47. Accordingly, in view of the above, the Accused No. 1 has failed to rebut the statutory presumption, which has been raised in favor of the Complainant u/s 25(5) PASA Act r/s 139 r/w 118 of NI Act. In these circumstances and in view of the above detailed discussion, this court is of the considered opinion that the Accused No. 1 has failed to rebut the presumption under Section 139 of Negotiable Instruments Act, 1881 in favour of the Complainant and ingredients of Section 25 PASA Act have been fully proved. Page 18 of 20
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CC No.624489/2016Therefore, Accused No. 1 is held guilty and is convicted of the offence punishable under Section 25 Payment and Settlement Systems Act, 2007.
Vicarious Liability of Accused No. 2
48. Coming to the role of Accused No. 2, it is noted that the ECS mandate, Ex. CW1/C and the loan agreement, Ex. DW1/X1, have been admittedly signed by Accused No. 2, on behalf of Accused No. 1 Company. Accused No. 2 has also not raised any plea as to his non-involvement in the day-to-day affairs of the Accused No. 1 at the time of framing of notice under Section 251 CrPC, statement of Accused under Section 313 CrPC or even at the time of his defence evidence. In fact, throughout the proceedings, Accused No. 1 company has been represented by Accused No. 2. Further, the Accused No. 2 has admitted to dealing with the Complainant on behalf of Accused No. 1 company in his defence to notice under Section 251, CrPC and in his statement under Section 313 CrPC. Further, in his cross-examination dated 27.06.2022, the Accused No. 2 has stated that "it is correct that I was the authorized signatory of the Accused No. 1 company". In the case of National Small Industries Corporation Ltd. v. Harmeet Singh Paintal and Ors., (2010) 3 SCC 330, it has been held that no specific averment is required against the Accused who was the Managing Director/ Joint Managing Director of the Accused company or who is signatory of the cheque, as they by virtue of their position are vicariously liable for the offence punishable under section 138 read with 141 of the NI Act. Given that the ECS mandate in question has been signed by Accused No. 2 and in light of the facts laid out above, all ingredients stand proved against Accused No. 2. Page 19 of 20
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CC No.624489/2016Conclusion
49. Therefore, Accused No. 1 is convicted for commission of offence punishable under Section 25 Payment and Settlement Systems Act, 2007. The management of the Accused No. 1 was being carried out by Accused No. 2, even Ex. DW1/X1, Ex. CW1/C has been signed by him being the director/authorized signatory of Accused No. 1 and hence, he stands convicted being director/ authorised signatory of the present ECS mandate for offence punishable under Section 25 Payment and Settlement Systems Act, 2007 read with Section 141 of the NI Act.
ORDER: CONVICTION
Announced in Open Court (Twinkle Chawla)
MM (NI-Act 02), South East
Saket Court, New Delhi
Note: This judgment contains 20 pages and each page has been signed by me.
(Twinkle Chawla) MM (NI-Act 02), South East Saket Court, New Delhi Page 20 of 20