Delhi District Court
I Kay Holding Co Pvt Ltd vs M/E Keltech Infrastructure Limited on 1 August, 2024
IN THE COURT OF SH. AAKASH SHARMA
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT)-03
SOUTH EAST, SAKET: NEW DELHI
1.Complainant case number 637634/2016
2. Name of the complainant I Kay Holding Co Pvt Ltd Office at: 260, II Floor, Ashoka Enclave, Main Sector-35, Faridabad, Haryana.
Through Ajay Chawla (Director) S/o Late Sh. I.K. Chawla, R/o. S-47, Greater Kailash-I, New Delhi-110048.
3. Name and address of the M/s Keltech Infrastructure Ltd accused persons (Accused No. 1) Office at: 7 I.P. Building, U.G.F. 2 & 3, E-109, Pandav Nagar, Near Akshardham Temple, Patparganj, Delhi-110092.
Mr. Narinder Kumar S/o Late Sh.
Shyam Sunder (Accused No. 2) R/o H.No. 502, Pariwar Apartments, I.P. Extension, Patparganj, Delhi-
110092.
Mrs. Indu Bala W/o Sh. Narinder Kumar (Accused No. 3) R/o H.No. 502, Pariwar Apartments, I.P. Extension, Patparganj, Delhi-
110092.
4. Offence complained of Section 138 of the Negotiable Instruments Act, 1881
5. Plea of the accused Pleaded not guilty and claimed trial
6. Final order Accused No. 1 is convicted Accused No. 2 is convicted Accused No. 3 is convicted
7. Date of institution 14.12.2016
8. Date of reserving the 26.06.2024 judgment Digitally signed by Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.1 of23 AAKASH AAKASH SHARMA SHARMA Date:
2024.08.01 15:47:57 +0530
9. Date of pronouncement 01.08.2024
-:JUDGEMENT:-
1. The present complaint under section 138 Negotiable Instruments Act, 1881 (herein referred to as NI Act) has been filed by Mr. Ajay Chawla (hereinafter referred to as the 'complainant') against M/s Keltech Infrastructure Ltd (hereinafter 'accused No. 1'), Mr. Narinder Kumar (hereinafter referred to as the 'accused no. 2') and Mrs. Indu Bala (hereinafter referred to as the 'accused no. 3'). Accused no. 4 Mr. Manish Kumar Goel was dropped from the array of accused and was discharged vide order dated 26.09.2019 passed by the Ld. Predecessor of this Court.
2. Briefly stated, the case of the complainant is that accused No. 1 is a company engaged in the business of Real Estate Construction and Development. Having its registered office at 7, I.P. Building, U.G.F. 2 & 3, E-109, Pandav Nagar, (near Akshardham Temple), Patparganj, Delhi-110092. That accused No. 2 and 3 are the Directors of accused No. 1 company who AAKASH SHARMA have been running the business and actively participating in the day to day affairs of the accused No. 1 company. That accused Digitally signed by AAKASH No. 1 company being the owner of the plot at Block K-1, G.H. SHARMA Date:
2024.08.01 Plot No. 6 in the project named "Kumar Golf Vista" at Crossing 15:48:01 +0530 Republic, NH-24, Ghaziabad, UP is constructing multi-storey building to be called "Kumar Golf Vista" and the complainant agreed to purchase Flat bearing No. K-007, Ground Floor for Rs. 36,00,000/-, Block K-1, GH Plot No. 6, "Kumar Golf Vista" at Crossing Republic, NH-24, Ghaziabad, UP, vide agreement dated Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.2 of23 13.02.2014 for a total agreed sale consideration of Rs.
36,00,000/- which total amount has been paid by the complainant to accused no. 1 company, which was duly confirmed and acknowledged. The accused No. 1 company immediately thereafter entered into another agreement dated 13.02.2014 for buy back of the above detailed flat detailing that the peaceful and physical possession of the said flat bearing No. K-007, complete AAKASH in all respects shall be handed over to the complainant to his full SHARMA satisfaction within a period of 12 months i.e. by 14.02.2016. It Digitally signed was further agreed that in case accused No. 1 company failed to by AAKASH SHARMA Date: complete the construction and failed to hand over the peaceful 2024.08.01 15:48:05 +0530 and physical possession of the abovesaid flat on or before the due date i.e. 14.02.2016, then the accused no. 1 company agrees to purchase back the said Flat No. K-007, from the complainant at the agreed predetermined composite sale price of Rs. 36,00,000/-. That the accused No. 1 company to effectuate its bonafides and commitments of timely payments issued PDC No. 204091 dated 14.02.2016 for Rs. 36,00,000/- drawn on Axis Bank Ltd, Mayur Vihar, Delhi-110091 towards the agreed predetermined sale price. That since accused No. 1 company could not complete the construction and deliver either the possession of the said flat or refund the sale consideration on the due date i.e. 14.02.2016 as per the terms of the agreement, hence accused vide their communication dated 10.02.2016 sought extension of the time by 12 months i.e. till 13.02.2017. That complainant vide communication dated 11.02.2016 granted one time final extension of 12 months i.e. upto 13.02.2017 and complainant further requested for the issuance of new PDC in lieu of the existing cheque no. 204091 dated 14.02.2016. That the Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.3 of23 accused No. 1 company vide their communication dated 12.02.2016 issued fresh PDC bearing cheque No. 292525 for Rs. 36,00,000/- dated 13.02.2017 drawn on Axis Bank Ltd, Vasundhara Enclave Ghaziabad, UP in lieu of the earlier PDC No. 204091 dated 14.02.2016. In view of the extension of the tenure by 12 months, accused No. 1 company further vide their communication dated 13.02.2016 in order to bind themselves and AAKASH to secure the return of the money of the complainant, agreed to SHARMA pay an assured return on the entire composite consideration amount of Rs. 36,00,000/- @ 24 % per annum to the complainant Digitally signed by AAKASH SHARMA and in terms thereof issued 12 PDCs of Rs. 72,000/- each bearing Date:
2024.08.01 numbers 292513, 292514, 292515, 292516, 292517, 292518, 15:48:09 +0530 292519, 292520, 292521, 292522, 292523 and 292524 dated
13.03.2016, 13.04.2016, 13.05.2016, 13.06.2016, 13.07.2016, 13.08.2016, 13.09.2016, 13.10.2016, 13.11.2016, 13.12.2016, 13.01.2017 and 13.02.2017 respectively all drawn on Axis Bank Ltd. That however the payment cheque of assured returns number 292513 dated 13.03.2016, 292514 dated 13.04.2016 and 292515 dated 13.05.2016 for Rs. 72,000/- each, since expired, however, accused no. 1 company replaced the abovesaid cheques and issued fresh cheques no. 307220, 307224 and 096180 all three dated 27.07.2016 for Rs. 72,000/- each, drawn on Axis Ban Ltd vide their communication dated 27.07.2016, and also cheque no. 292516 dated 13.06.2016 for Rs. 72,000/- since expired, replaced the same and issued fresh cheque no. 329356 dated 13.09.2016 for Rs. 72,000/- drawn on Axis Bank Ltd vide communication dated 13.09.2016. It is the case of the complainant that the cheques numbers "307220" dated 26.07.2016, and "307224" dated 26.07.2016 for Rs. 72,000/-each respectively, both Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.4 of23 drawn on Axis Bank Ltd, Mayur Vihar, Delhi-110091 were duly signed by accused No. 2 as the authorized signatory of accused No. 1 company in the presence, instructions, with the consent and confirmation of accused No. 3. The said cheques were handed over to the complainant in the presence of accused No. 2 and 3 who are the Directors of accused No. 1 company being incharge of and responsible to the company for the conduct of day to day running and managing the affairs / business of the accused No. 1 company.
AAKASH SHARMA
3. Upon presentation of the said cheques, they got Digitally signed dishonored with the remarks 'Insufficient Funds' vide two by AAKASH SHARMA return memos both dated 13.10.2016 qua cheques no. 307220 Date: 2024.08.01 15:48:13 +0530 and 307224. The legal demand notice dated 26.10.2016 was duly sent by the complainant to the accused persons through speed post at their official address as well as their residential address and they were duly served. The accused persons failed to pay the amount mentioned on the cheques in question within the statutory period. Hence, the present complaint under Section 138 r/w Section 141 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') was filed.
4. Vide order dated 14.12.2016, the accused persons were summoned by the Ld. Predecessor of this Court. On issuance of summons, the accused No. 2 entered appearance first time on 02.05.2017 and accused No. 3 and 4 entered appearance first time on 07.07.2017 in the present matter and accused No. 2, 3 and 4 was admitted to bail on 07.07.2017. Accused No. 4 Manish Kumar Goel was discharged from the present case vide order of the Ld. Predecessor dated 26.09.2019 as no Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.5 of23 plausible ground was made to proceed against accused no. 4 as accused no. 4 was neither signatory on the cheque nor the Director of the accused no. 1 company when the offence was committed. Notice u/s 251 CrPC was served upon the accused No. 1, 2 and 3 on 26.09.2019, to which accused No. 1, 2 and 3 pleaded not guilty and claimed trial. Thereafter, accused No. 1, 2 and 3 were allowed to cross-examine the complainant u/s 145(2) AAKASH NI Act. Accused no. 1, 2 and 3 cross-examined complainant as SHARMA CW-1 on 26.08.2022. The complainant evidence was closed vide Digitally signed by order dated 26.08.2022 and thereafter, statement u/s 313 CrPC of AAKASH SHARMA Date:
the accused No. 2 was recorded on 07.02.2023 and accused No. 3 2024.08.01 15:48:16 +0530 on 28.04.2023 and the matter was fixed for final arguments as the accused persons did not wish to lead DE. Final arguments were heard on 26.06.2024. Written submissions were filed on behalf of the accused persons. Matter was reserved for judgment.
EVIDENCE:-
5. In order to support its case, the complainant had stepped into the witness box as CW-1 and tendered his evidence by way of an affidavit into evidence wherein averments made in the complaint were reiterated. He also relied upon various documents such as:
(a) Board Resolution on behalf of complainant company as Ex.CW1/1(OSR);
(b) Master Data and Signatory details of the accused No. 1 company as Ex.CW1/2(OSR);
(b) Agreement to sell dated 13.02.2014 as Ex.CW1/3(OSR);
(c) Buy back agreement dated 13.02.2014 as Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.6 of23 Ex.CW1/4(OSR);
(d) Communication dated 10.02.2016 for extension of time from accused persons to complainant as Ex.CW1/5(OSR);
(e) Communication dated 11.02.2016 for extension of time from accused persons to complainant as Ex.CW1/6(OSR); AAKASH SHARMA
(f) Communication dated 12.02.2016 for extension of time from accused persons to complainant as Digitally signed by Ex.CW1/7(OSR); AAKASH SHARMA Date:
(g) Communication dated 13.02.2016 for payment of 2024.08.01 15:48:19 +0530 assured monthly return as Ex.CW1/8(OSR);
(h) Communication dated 27.07.2016 and 13.09.2016 replacing the outdated cheque as Ex.CW1/9(OSR) and Ex.CW1/10(OSR);
(i) Cheque bearing No. "307220" and "307224" as Ex.CW1/11 and Ex.CW1/12 respectively;
(j) Two return memos dated 13.10.2016 qua cheques No. 307220 and 307224 respectively as Ex.CW1/13 and Ex.CW1/14;
(k) Copy of legal demand notice dated 26.10.2016 as Ex.CW1/15;
(l) Speed post receipts of India Post as Ex.CW1/16, Ex.CW1/17, Ex.CW1/18, Ex.CW1/19, Ex.CW1/20, Ex.CW1/21 and Ex.CW1/22 respectively;
(m) Copies of tracking reports as Ex.CW1/23, Ex.CW1/24,Ex.CW1/25,Ex.CW1/26, Ex.CW1/27, and Ex.CW1/28;
(n) Returned envelope qua accused no. 4 as Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.7 of23 Ex.CW1/29;
(o) Certificate under Section 65-B IEA to prove the tracking reports being internet generated printouts.
6. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed.
Now, Section 138 Negotiable Instrument Act provides as under:
Section 138. Dishonour of cheque for insufficiency, etc., of funds in the account. Where any cheque drawn by a person on an account maintained by him AAKASH with a banker for payment of any amount of money SHARMA to another person from out of that account for the discharge, in whole or in part, of any debt or other Digitally signed liability, is returned by the bank unpaid, either by AAKASH because of the amount of money standing to the SHARMA credit of that account is insufficient to honour the Date: 2024.08.01 cheque or that it exceeds the amount arranged to be 15:48:21 +0530 paid from that account by an agreement made with that 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 cheque, or with both:
Provided that nothing contained in this section shall apply unless (a) the cheque has been presented to the bank within a period of six months (reduced to three months vide notification no. RBI/201112/251, DBOD AMLBCNo. 47/19.01.0062011/12,dated 04.11.2011) from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, 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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation -- for the purposes of this section, "debt or other liability"
Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.8 of23 means a legally enforceable debt or other liability. It is well settled position of law that to constitute an offence under S.138 N.I. Act, the following ingredients are required to be fulfilled: (1) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability; (2) cheque has been presented to the bank within a period of six months (now three months) from the date on which it is drawn or within AAKASH the period of its validity whichever is earlier; (3) returning the cheque unpaid by the drawee bank for SHARMA want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum Digitally signed by AAKASH SHARMA covered by the cheque, (4) giving notice in writing Date: 2024.08.01 to the drawer of the cheque within 30 days of the 15:48:25 +0530 receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the N I Act.
The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption under Section 139, that the holder of cheque receiving the same of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in Basalingappa v. Mudibasappa, AIR 2019 SC 1983, noted at para 23 as follows [Bharat Barrel and Drum Manufacturing Company v. Amin Chand Pyarelal, (1999) 3 SCC 35; M.S. Narayana Menon alias Mani v. State of Kerala and another, (2006) 6 SCC 39; Krishna Janardhan Bhat v.
Dattatraya G. Hegde, (2008) 4 SCC 54; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Rangappa v. Sri Mohan, (2010) 11 SCC 441 referred]:
(i) Once the execution of cheque is admitted, Section Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.9 of23 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. AAKASH Inference of preponderance of probabilities can be SHARMA drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. Digitally signed by AAKASH
(iv) That it is not necessary for the accused to come SHARMA in the witness box in support of his defence, Section Date:
139 imposes an evidentiary burden and not a 2024.08.01 15:48:28 +0530 persuasive burden.
(v) It is not necessary for the accused to come in the witness box to support his defence.
To put in nutshell, the law regarding the presumption for the offence under Section 138 N.I. Act,is that the presumptions under Sections 118(a) and 139 have to be compulsorily raised as soon as execution of cheque by the accused is admitted or proved by the complainant and thereafter burden is shifted upon the accused to prove otherwise. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The onus to prove the issuance of the cheque lies upon the complainant, and the same has to be proved beyond reasonable doubt, unless the accused admits the same. Once the issuance of cheque is established, either by admission or by positive evidence, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises. We can summarize the general principles in the following way:
Onus of proof: Section 139 of the Negotiable Instruments Act, 1881 states that 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. Therefore, here the onus shifts upon the accused to prove the nonexistence of debt or other liability. Section 139 of the N.I. Act uses the word "shall Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.10 of23 presume", which means that the presumption under Section 139 is rebuttable.
Standard of proof: The standard of proof required to rebut the presumption under Section 139 is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or other liability, the onus shifts back to the complainant to prove by way of evidence, beyond reasonable doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debt or other liability, and AAKASH now the presumptions under Section 118 (a) and SHARMA Section 139 will not come to the aid of the complainant.Digitally signed by AAKASH
Mode of Proof: The accused may adduce direct SHARMA evidence to prove that the cheque in question was Date: 2024.08.01 15:48:31 +0530 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 prove the nonexistence of the consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that a bare denial of passing of consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances upon the consideration of which, the Court may either believe that the consideration and debt did not exist, or their nonexistence was so probable that a prudent man would, under circumstances of the case, act upon the plea that they did not exist.
As discussed above, from the legal provisions and the law laid down in various judgments, it can be safely gathered that it is for the accused to rebut the presumptions. He can do so by cross examining the complainant, leading defence evidence, thereby demolishing the case of the complainant. It is amply clear that the accused does not need to discharge his or her liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the complainant. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore the prosecution cannot stand. In this situation the Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.11 of23 accused has nothing to do except to point inherent inconsistency in the version of the complainant or the accused can give his version of the story and say that on the basis of his version the story of the complainant cannot be believed.
ARGUMENTS AND APPRECIATION OF EVIDENCE:-
7. Ld. Counsel for the complainant has argued that all the requirements of Section 138 NI Act have been met with in the present case and hence, the accused persons be convicted. I have heard the arguments and also gone through the record with due circumspection. AAKASH SHARMA
8. In the case at hand, Ld. Counsel for the complainant has Digitally signed by AAKASH submitted that the accused persons have not disputed the issuance SHARMA Date: of cheques in the present case, thus, the presumptions u/s 118 (a) 2024.08.01 15:48:35 +0530 read with Section 139 of NI Act about the cheques in question having been issued for consideration and in discharge of legal liability should arise in favour of the complainant. On the contrary, Ld. Counsel for accused persons has submitted that the complainant has misused the cheques in question with malafide intention without sending any intimation before presenting the cheques. Therefore, presumption under S. 139 of NI Act, should not arise. It is also further submitted that complaint is not maintainable as not being filed on behalf of a juristic person as no evidence has been placed on record to show the complainant company is a registered company or a juristic person competent to file the complaint. That complaint has not been filed by an authorized person on behalf of the complainant company. That AR of the complainant is not duly authorized person / Director of the complainant as there is no evidence to prove that an authorised person signed the Board Resolution Ex.CW1/1(OSR).
Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.12 of23 That the Board Resolution is vague and is to file the cases in the court of The Ld. Chief Metropolitan Magistrate, New Delhi and not in the court of The Ld. Chief Metropolitan Magistrate, South East, Saket Courts where the present complaint has been filed. That the copy of the Company Master Data of accused no. 1 is forged and fabricated and no certificate under Section 65-B of the Indian Evidence Act has been filed qua the document Ex.CW1/2 (OSR). That the document Ex.CW1/2 (OSR) is being shown as AAKASH printout taken on 12.02.2016 while as per this document itself SHARMA Manish Kumar Goel (accused no. 4 already dropped) resigned Digitally signed from company on 19.09.2016 and expiry date of DSC of accused by AAKASH SHARMA Date: no. 2 Narender Kumar and Indu Bala is 28.01.2018 and that of 2024.08.01 15:48:42 +0530 Manish Kumar Goel is 27.09.2018. That the complaint has been filed in mechanical and cut paste manner without proving the substance and cause of action. That the accused company has not been impleaded properly as there is no name of any Director through whom the complainant wants to implead the accused company. That the complainant has not filed any document / Board Resolution to prove that Sh. Ajay Chawla was duly authorized to enter the agreements i.e. Ex.CW1/3 (OSR) and Ex.CW1/4 (OSR) with the accused persons. That cheques issued in advance as security cheques for assured returns to be accrued in the future are not maintainable under Section 138 NI Act. That complainant has not proved that the other accused were incharge or responsible to the accused no. 1 company for conduct of day to day running and managing the affairs and business of the accused no. 1 company. That accused persons are entitled to be acquitted in the present case as the complainant has failed to prove the complaint as per law for commission of any offence Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.13 of23 under Section 138 r/w 141/142 of NI Act.
The three-Judge Bench of Hon'ble Supreme Court in Rangappa Vs. Sri Mohan, (2010) 11 SCC 441 has held that:
"where the fact of signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttable nature and the onus is then on the accused to raise a probable defence."
9. In the present case, the accused no. 2 has not denied his AAKASH signatures on the cheques. Thus, the factum of signatures on the SHARMA cheques are not disputed and has been acknowledged.
Digitally signed by AAKASH SHARMA10. It is pertinent to mention here that Sec. 139 only raises the Date:
2024.08.01 15:48:45 +0530presumption on fulfillment of its conditions that the cheque was issued for discharge of in whole or in part any debt or other liability but there is no presumption as to the existence of the debt or liabilty as such. In Rangappa (supra) it has been held that :
"Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability."
11. As regards legal notice, the receipt of the same has been disputed by the accused persons. Accused no. 2 stated that "it is a matter of record" to the question that he was served with the legal demand notice. Accused No. 3 stated that she did not know whether she received the legal notice in statement under Section 313 Cr.P.C. However, as per postal receipts, legal demand notice was duly sent to the accused persons at their correct addresses. As per provisions of Section 114 of Indian Evidence Act, 1872, read with Section 27 of General Clauses Act, the court may Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.14 of23 presume that legal notice duly addressed to the accused persons and dispatched to them by way of post was actually received by the accused persons, regard being had to common course of natural events. Reliance is also placed upon the case of C C Alavi Haji v. Palapetty Muhammed [2007 (6) SCC 555] wherein it was held by the Hon'ble Supreme Court that:
"it is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of criminal law, AAKASH where there is no stipulation of giving of a notice before filing SHARMA a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Digitally signed by AAKASH Section 138 of the Act, make payment of the cheque amount SHARMA and submit to the court that he had made payment within 15 Date: 2024.08.01 15:48:48 +0530 days of receipt of summons and therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court alongwith the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of General Clauses Act and Section 114 of Indian Evidence Act."
It is also reflected from the record that legal notice has been addressed to the accused persons at their registered addresses as per the accused no. 1 company Master Data filed with the ROC i.e. Ex.CW1/2 (OSR). Hence, in my opinion, legal notice was duly served upon the accused persons.
12. As regards to the fact of dishonour of the cheques in question, the return memos filed by the complainant clearly show that the cheques in question were dishonoured for the reason 'insufficient funds'. In the case at hand, neither any argument has been raised on behalf of the accused persons to dispute the dishonor of the cheques nor this fact has been denied at any stage Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.15 of23 of the matter. Thus, taking into account that dishonour of cheques is not disputed, this fact, also stands proved.
13. Thus, the presentation of the cheques in question, their dishonour and service of legal notice is not under question. Consequently, the complainant has successfully raised a presumption under Section 139 NI Act.
Accordingly, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheque i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused persons to establish a probable defence so as to rebut such a presumption.
In the segment on legal framework, set out above, the legal proposition with respect to the burden of proof upon the accused AAKASH has already been discussed. Hence, it is now to be examined as to SHARMA whether the accused brought any material on record or pointed Digitally signed by AAKASH SHARMA out glaring discrepancies in the material produced by the Date:
2024.08.01 Complainant for dislodging the presumption which meets the 15:48:54 +0530 standard of preponderance of probabilities.
14. In the present matter, the main defence of the accused persons is that the present cheques in question were signed blank cheques given as security and that no legal liability is owed towards the complainant as the complainant was the buyer of the flats who is already having the flats in his name but the complainant misused the security cheques in question despite there being no legally enforceable debt against the accused persons. That cheques were issued in advance as security cheques for the assured returns to be accrued in the future, hence Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.16 of23 complaint is not maintainable under Section 138 NI Act as the cheques were not issued towards a legally enforceable debt.
15. The law pertaining to cheque issued as security has now been settled by the Hon'ble Supreme Court in Sripati Singh Vs. State of Jharkhand and Anr, 2021 SCC Online SC 1002, wherein the Hon'ble Supreme court has held that;
"A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every AAKASH circumstance. 'Security' in its true sense is SHARMA the state of being safe and the security given Digitally signed for a loan is something given as a pledge of by AAKASH SHARMA payment. It is given, deposited or pledged to Date: 2024.08.01 make certain the fulfilment of an obligation 15:48:57 +0530 to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured,the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow. When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.17 of23 issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered AAKASH situation due to which there would be SHARMA understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the Digitally signed by AAKASH defences that would be available to the SHARMA drawer of the cheque in a proceedings Date:
2024.08.01 initiated under Section 138 of the N.I. Act. 15:49:00 +0530 Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an 'on demand promissory note' and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation."
The present case pertains to the cheques in question which were given on behalf of the accused persons vide written communication addressed to complainant dated 13.02.2016 which is Ex.CW1/8 (OSR) wherein it is categorically mentioned Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.18 of23 that the PDCs for Rs. 72,000/- each are being issued for the assured return promised. Except making a bald assertion, accused persons have not brought on record any proof of payment of the assured return to the complainant by any other means or mode prior to the dates mentioned on the cheques in question. In these circumstances, it was incumbent upon the accused persons to arrange sufficient balance in the account of accused No. 1 to AAKASH SHARMA honour the PDCs in question which were to be presented subsequent to the dates mentioned on the cheques in Digitally signed by AAKASH question. The argument that cheques were not towards SHARMA Date:
2024.08.01 legally enforceable debt as they were issued in advance qua 15:49:02 +0530 assured returns to be accrued in future is liable to be rejected considering the documentary evidences brought on record by the complainant which establish that the cheques were issued as compensation of assured returns since the possession of the property was not duly completed in all respects by the accused no. 1 company which therefore had undertaken to bind itself to pay assured returns by issuing PDCs to the complainant in order to secure assured return on the entire sale consideration.
16. The argument given by the Ld. Counsel for the accused persons that Sh. Ajay Chawla was not duly authorized AR of the complainant is liable to be rejected as Ex.CW1/1 (OSR) is Board Resolution duly proved by the complainant. Also, the words, "in the court of Ld. Chief Metropolitan Magistrate, New Delhi"
appearing in Ex.CW1/1 (OSR) cannot be restricted only to New Delhi District but encompasses the entire jurisdiction of New Delhi City which includes the District South East, Saket, New Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.19 of23 Delhi. The submission that Ex.CW1/2(OSR) is forged and fabricated since it appears to be a printout taken on 12.02.2016 while as per this document itself Manish Kumar Goel resigned on 19.09.2016 and expiry date of DSC of Narender Kumar and Indu Bala is 28.01.2018 and that of Manish Kumar Goel is 27.09.2018 has been duly considered by this court. Ld. Counsel AAKASH SHARMA for the complainant has submitted that the date 12.02.2016 Digitally signed by AAKASH appearing on Ex.CW1/2(OSR) is in the American format SHARMA Date: 2024.08.01 15:49:06 +0530 mm/dd/yyyy so the date of printout is 02.12.2016 and not 12.02.2016. Also, Ld. Counsel for the complainant has submitted that this argument has been cleverly introduced at the stage of final arguments whereas CW-1 has not been cross-examined at all regarding Ex.CW1/2(OSR) which remained unchallenged during the trial. This court finds force in the submission of the Ld. Counsel for complainant. No dispute was raised regarding Ex.CW1/2(OSR) during cross-examination of CW-1 and merely on account of the printout date being in mm/dd/yyyy format, the same does not disprove the document Ex.CW1/2(OSR). Complainant has duly impleaded the other natural persons as accused alongwith accused no. 1 company in the complaint by invoking Section 141 NI Act with Section 138 NI Act. Further, the accused persons have not placed on record any documentary evidence and have not brought before the court any witnesses in support of their defence which could prove that the accused persons did not owe legal liability of the cheque in question in the present matter.
In view of the lack of evidences in support of the version of the accused persons and taking into consideration the plethora of documentary evidences placed on record by the complainant Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.20 of23 the court finds that the accused no.1 company is guilty of the offence u/s 138 NI Act.
17. Further, in deciding the liability of accused no. 2, first, this court has taken into consideration the fact that the accused no. 2 was a Director of accused no.1 when the offence in the present matter was committed has not been disputed. In addition, AAKASH SHARMA no dispute arose in relation to whether accused no. 2 had been involved in the day to day affairs of the business of the accused Digitally signed by AAKASH company at the time when the alleged offence under S.138 was SHARMA Date:
2024.08.01 committed. In the present matter, the cheques in question have 15:49:19 +0530 been admittedly signed by accused no.2. Perusal of record also reveals that the documents exhibited as Ex.CW1/3 (OSR), Ex.CW1/4 (OSR), Ex.CW1/5 (OSR), Ex.CW1/6 (OSR), Ex.CW1/7 (OSR), Ex.CW1/8, Ex.CW1/9 (OSR), Ex.CW1/10 (OSR), Ex.CW1/11 and Ex.CW1/12, all contain the signatures of accused no.2 on behalf of accused no. 1 company signing as its Director / authorized signatory. Even the plea that Ex.CW1/2(OSR) is not supported with Section 65-B Certificate has been taken belatedly by the accused persons only at the stage of final arguments. Even if Ex.CW1/2(OSR) is not read into evidence, considering the abovesaid evidence bearing the signatures of accused no. 2 as Director / signatory of accused no.
1, the fact that accused no.2 was involved in day to day affairs of accused no.1 company stands proved. Hence, accused no. 2 also stands convicted of the alleged offence under section 138 of NI act.
18. In deciding the liability of accused no.3, first, this court Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.21 of23 has taken into consideration, that the fact that the accused no.3 was a Director of Accused no.1 company when the offence in the present matter was committed, is not disputed. The dispute has only arose in relation to whether Accused no.3 was involved in the day to day affairs of business of the accused Company at the time the offence under S.138 was committed or not.
Perusal of the record reveals that the accused no.3 in her statement u/s 313 CrPC dated 28.04.2023, it was stated by the accused no.3 that "I am innocent and falsely implicated in this case. I am not legally liable to pay the cheques amount in question."
The document Ex.CW1/2(OSR) which is a company Master Data of accused No. 1, confirms the fact that accused no.3 was a Director / signatory of accused No. 1 beginning from 24.05.2010 with the designation of Wholetime Director which shows accused No. 3 was actively involved in the affairs of the accused company during the period when the transaction with the complainant occurred. It is also pertinent to note that accused No. AAKASH 3 was the Director of the company when the cheques in question SHARMA were issued and also when the cheques in question were Digitally signed presented for payment and dishonoured vide their respective by AAKASH SHARMA return memos. Accused No. 3 also received the legal notice Date: 2024.08.01 15:49:25 +0530 which was addressed at the registered address of the accused no. 1 as well as the residential address of accused no. 3 registered with the ROC. Accused No. 3 except making bald denials has not led any evidence on her behalf.
Thus, taking into consideration the evidences placed on record by the complainant, the fact that accused no.3 has not been able to prove that the offence was committed without her Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.22 of23 knowledge or that she had exercised all due diligence to prevent the commission of the offence. Hence, accused no. 3 also stands convicted of the alleged offence under section 138 of NI Act.
19. Resultantly, accused no. 1, 2 and 3 stand convicted in the present case.
Announced in the open court today on 1st August, 2024.
This judgment contains 23 pages all are signed by me. A copy of this judgment be placed on the official website of the District AAKASH SHARMA Court.
(AAKASH SHARMA) Digitally signed
Judicial Magistrate First Class (NI Act)-03 by AAKASH
SHARMA
South-East, Saket Courts, New Delhi Date:
2024.08.01
15:49:42
+0530
Ct. Case No. 637634/2016 I Kay Holding Co Pvt Ltd Vs. M/s Keltech Infrastructure Ltd Page No.23 of23