Delhi District Court
Atul Wadhwa vs M/S Grand Auto Capital And Ors on 5 June, 2024
IN THE COURT OF METROPOLITAN MAGISTRATE,
(NEGOTIABLE INSTRUMENT ACT) -07, SOUTH, SAKET
COURTS, NEW DELHI
Presided over by: SH. RISHABH TANWAR
CT Cases 2527/2019
Atul Wadhwa Vs. M/s. Grand Auto
Capital & Ors.
A. CNR No. : DLST020068602019
B. Date of Institution : 02.03.2019
C. Date of commission of : 15.02.2019
offence
D. Name of the complainant : Atul Wadhwa
S/o Sh. Anil Wadhwa
R/o D-10, IInd Floor, Panchsheel
Enclave, New Delhi-110017
Through his Special Power of
Attorney Shri Anil Wadhwa
E. Name of the accused, his : 1.M/s. Grand Auto Capital
parentage and address
Having office at C-42, Wazirpur
Industrial Area, New Delhi
(accused No.1 company)
2. Mr. Abhinav Rishi, being
partner of M/s. Grand Auto
Capital
CT Cases 2527/2019
Atul Wadhwa Vs.
M/s. Grand Auto Capital & Ors. Page 1 of 34
Digitally
signed by
RISHABH
RISHABH TANWAR
TANWAR Date:
2024.06.05
14:52:30
+0530
Having office at C-42, Wazirpur
Industrial Area, New Delhi
(accused No.2).
3. Mrs. Neetu Rishi, being
partner of M/s. Grand Auto
Capital
Having office at C-42, Wazirpur
Industrial Area, New Delhi,
(accused No.3)
4. Mr. Ashok Rishi, being partner
of M/s. Grand Auto Capital
Having office at C-42, Wazirpur
Industrial Area, New Delhi
(accused No.4).
F Offence complained of : Under section 138 Negotiable
Instruments Act, 1881
G. Plea of the accused : Pleaded not guilty and claimed trial.
H. Judgment reserved on : 18.05.2024
I. Date of Judgment : 05.06.2024
J. Final Order : CONVICTION
BRIEF FACTS OF THE CASE:-
1. The instant matter has originated out of a complaint under Section 138 Negotiable Instruments Act (hereinafter referred to as 'NI Act'), filed by the complainant company namely Atul Wadhwa through its SPA Sh. Anil Wadhwa against the accused No.1 firm M/s. Grand Auto Capital, accused No.2 Mr. Abhinav Rishi, being partner of accused No.1 firm, accused No.3 Mrs. Neetu Rishi, being partner of accused No.1 firm and accused CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 2 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:52:37 +0530 No.4 Mr. Ashok Rishi being partner of accused No.1 firm alleging that cheques bearing no. 002036 dt. 02.01.2019 for sum of Rs.99,500/- and cheque bearing No. 002037 dt. 01.02.2019 for sum of Rs.18,47,401/- both drawn on HDFC Bank Ltd., Shalimar Bagh II, New Delhi Branch was issued by the accused persons in favour of the complainant, in discharge of a legal liability. The above-mentioned cheques have been dishonored and the accused have not paid the said amount even after receiving the prescribed legal demand notice dated 30.01.2019. By virtue of this judgment, the present complaint is being disposed of.
2. It is the case of the complainant that Sh. Anil Wadhwa is the SPA of complainant and is well conversant with facts of the case. It is further the case of the complainant that accused no.1 is a partnership firm and accused No.2 to 4 are the partners of the accused firm and accused No.2 to 4 were incharge of and responsible for the affairs of the accused no.1 firm and all accused No.2 to 4 participated in the activities of the accused No.1 firm and had actively participated in the transaction in question. It is further the case of complainant that he was interested in purchasing a Skoda Car and contacted accused persons as accused No.1 was stated to be an authorised dealer of Skoda Cars. It is further the case of complainant that he booked one Skoda new Octavia Style 1.8 TSI AT pearl white in month of September 2018 and accused persons committed delivery of the same for 10.10.2018 i.e. first navratra which was considered as auspicious. It is further the case that complainant CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 3 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:52:42 +0530 paid entire price of car i.e. Rs.19,46,901/- to accused persons at the time of booking itself wherein complainant had deposited Rs.1,00,000/- in cash with the accused persons and availed bank loan of Rs.18,46,901/- from HDFC Bank Ltd. It is further the case that entire payment was made to accused persons in the month of September 2018 at the time of booking. It is further the case of complainant that accused persons failed to fulfill their commitment as he did not get delivery of booked car on first navaratra. It is further the case of complainant that on repeated requests the accused persons requested the complainant to use another car which was a test drive car and accordingly one Skoda Octavia Style Plus Automatic 1.8 TSI Car bearing chassis No. TMBBDENE9HA006643 was handed over to complainant on 15.10.2018 for his use as a stopgap arrangement till delivery of booked car. Thereafter, complainant kept on pursuing the matter with accused persons, but they failed to deliver the booked car. Thereafter on 23.11.2018 a mail was sent on behalf of accused persons to complainant whereby apology for the delay was tendered, the accused also promised complainant either to deliver the booked car or to refund the advance amount of Rs.19,46,901 by 10.12.2018. It is further the case of complainant in order to show bona fide accused issued two cheques bearing No. 002036 dt. 02.01.2019 for sum of Rs.99,500/- and cheque bearing No. 002037 dt. 01.02.2019 for sum of Rs.18,47,401/-
both drawn on HDFC Bank Ltd., Shalimar Bagh II, New Delhi Branch with clear understanding that in case the accused persons failed to deliver the car or to refund the booking price, CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 4 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:52:47 +0530 then complainant would be entitled to present the cheques for payment. It is further the case that accused persons failed to fulfil their aforesaid commitment within stipulated time and thereafter accused persons requested complainant to purchase the car already handed over to complainant for his time being use and accordingly sales invoice bearing No. DEL01-2018- 19/000243 dt. 18.12.2018 was issued and under the arrangement arrived at with regard to purchase of test drive car, accused persons sold the car to complainant at a price of Rs.15,77,250/-, thereafter accused persons undertook to get the registration of said car at their cost and to insure the said car at their cost in order to adjust the excess of the booking amount. It is further the case of complainant that accused persons also promised to refund the balance amount of Rs.50,000/-, however accused persons failed to fulfill this commitment also and thereafter complainant requested accused persons vide email dt. 27.12.2018 to do the aforesaid as per their promise. It is further the case of complainant that in view of repeated failures to fulfill their promises, complainant decided to revoke all understandings and asked accused persons to refund the booking amount and he clearly stated that he did not want to retain the test drive car, thereupon accused persons asked complainant the aforementioned cheques which were issued by accused persons in discharge of their liability and assured complainant that both cheques shall be honoured upon presentation. Thereafter when complainant presented the cheque bearing No.002036, the same got returned dishonored with remarks "funds insufficient" vide dishonor memo dated CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 5 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:52:52 +0530 02.01.2019 and when complainant presented the cheque bearing No.002037, the same got returned dishonored with remarks "funds insufficient" vide dishonor memo dated 02.01.2019 Thereafter, complainant contacted accused persons of payment, however after prevarication the accused persons refused to make the payment to the complainant. Thereafter, the statutory legal notice dated 30.01.2019 was sent and accused persons received the notice on 31.01.2019.
Consequently, the present complaint was filed against accused persons as the accused persons have failed to pay the same within the prescribed statutory period of 15 days.
3. Summons were issued against the accused vide order dated 19.07.2019. Accused persons made their first appearance before the Court on 07.02.2022 an application for cancellation of NBWs was moved which was stayed till next date of hearing. Thereafter on 11.05.2022 application for cancellation of process u/s. 82 CrPC was moved as issued vide order dt. 26.03.2022 and on 08.06.2022 process u/s. 82 CrPC was cancelled subject to cost of Rs.1000/- each to be paid to the complainant. Thereafter, on same day i.e. on 08.06.2022 accused persons were admitted to bail and notice was framed.
4. Notice u/s. 251 was framed against accused No.1 M/s. Grand Auto Capital through accused No.2 and accused No.2. Mr. Abhinav Rishi, being partner of accused No.1 on 08.06.2022, wherein he stated that the cheques in question does belong to accused No.1 and same had been signed by him and the other CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 6 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:52:58 +0530 details had been filled up by him except the date. He further stated that he did not receive the legal demand notice which is dated 30.01.2018 which must be wrong. He further stated that he had shifted out of the address mentioned on the same. He further stated that they are dealers of Skoda Cars and the complainant had paid an amount of Rs.19,46,901/- as advance for booking Octavia Car, due to some reason they would not deliver the car on the date fixed which was somewhere in October 2018. He further stated that their salesperson got call from complainant for either delivery of the car or refund of the amount be paid, in the meantime, they gave complainant a demo car Octavia of same model, but it had already run for about 5000-7000 km approximately. He further stated that he lost his dealership in November 2018. He further stated the cheques in question were given as security cheques and a demo car was also with the complainant. He further stated that on around 10-11 December, the complainant and he settled their dispute at the Wazirpur premises and in accordance with the settlement they had to take certain steps which had been complied by him to the extent that he had asked the complainant to provide him relevant details for due registration of the car which was to be done by him. He further stated that he had email confirming the aforesaid facts and the acceptance of the complainant. He further stated that he had no liability towards the complainant to pay the cheque amount.
5. Notice u/s. 251 was framed against accused No.3 Mrs. Neetu Rishi, being partner of accused No.1 on 08.06.2022 wherein CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 7 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:53:04 +0530 she stated that the cheques in question does belong to accused No.1 and same had been signed by accused No.2 and the other details was not filled up by her. She further stated that she was partner of accused no.1 but her son used to look after the dealership and she used to stay in Bilaspur. She further stated that she did not receive the legal demand notice as the address mentioned on the same was the address of showroom in Delhi. She further stated that she was told by her son that the cheques were issued as security and the same was supposed to be returned at the time of delivery of the car. She further stated that she had no liability towards the complainant.
6. Notice u/s. 251 was framed against accused No.4 Ashok Rishi, being partner of accused No.1 on 08.06.2022, wherein he stated that the cheques in question does belong to accused No.1 and same were signed by accused No.2. He further stated that the other details had not been filed up by him (accused No.4). He further stated that he was the partner of the accused No.1. He further stated that he had not received any legal demand notice, the address mentioned on the same was address of showroom in Delhi. He further stated that he was a partner in accused No.1 but he was not involved in day-to-day affairs and did not have knowledge regarding the operations. He further stated that he had no liability towards the complainant.
7. Complainant SPA Anil Wadhwa entered the witness box and examined himself as CW-1 on 19.07.2019. He tendered his evidence by way of affidavit in his pre-summoning evidence CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 8 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:53:10 +0530 affidavit as Ex. CW-1/A bearing his signatures at point A and B. and relied upon the documents namely:
a. Special Power of Attorney in favour of Sh. Anil Wadhwa Ex.CW1/1.
b. Letter dt. 15.10.2018 Ex.CW1/2,
c. Email dt. 23.11.2018 Ex.CW1/3,
d. Sales invoice dt. 18.12.2018 Ex.CW1/4,
e. Email dt. 27.12.2018 Ex.CW1/5,
f. Original cheque bearing No.002036 dt. 02.01.2019
Ex.CW1/6,
g. Copy of original cheque bearing No. 002037 dt.
02.01.2019 Ex.CW1/7,
h. Returning memos dt. 02.01.2019 and 09.01.2019
Ex.CW1/8 and Ex. CW1/9 respectively, i. Legal notice dt. 30.01.2018 Ex.CW1/10, j. Postal receipts Ex.CW1/11 to Ex.CW1/15 k. Tracking report Ex.CW1/16 to Ex.CW1/19 respectively, l. Original returned envelope Ex.CW1/20, m. The net banking details Ex.CW1/21.
8. The complainant SPA namely Sh. Anil Wadhwa was recalled for his cross-examination u/s. 145 (2) NI Act on 25.02.2023, where he deposed that whenever his son Sh. Atul Wadhwa has visited the accused persons, he had always accompanied him. He further stated that most of the times he had met only the accused No.2 namely Sh. Abhinav Rishi. He further stated that CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 9 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:53:16 +0530 the loaner car was to be used as stop gap arrangement till the delivery of the booked car. He further admitted the suggestion given to him that the legal notice was served upon the accused and had admitted the judgment dt. 27.08.2020 which was marked as Mark A. He further stated that they have not received any WhatsApp/phone calls regarding the registration of the car.
9. The complainant also examined one Mr. Ravi Rahul, personal banker HDFC Bank, Panchsheel Park as CW-2 who had brought the original cheque bearing No.002037 dt. 02.01.2019 drawn on HDFC Bank by the accused company in the sum of Rs. 18,47,401/- and the same was Ex.CW2/1. He also brought the original return memo dt. 09.01.2019 regarding the dishonour of the abovesaid cheque which was Ex.CW2/2.
10. Vide order dt. 25.02.2023, the SPA of the complainant had closed the complainant's evidence.
11. The statement of accused No. 2 Sh. Abhinav Rishi u/s. 313 Cr.P.C was recorded on 24.04.2023 wherein he stated that the cheques were issued as security and the same were undated. He has further stated that he had received an advance amount from the complainant for booking of the car, however the said car could not be given in the stipulated time, and we gave a test drive car to the complainant. He further stated that in the meanwhile, the dealership was gone, and they have issued undated security cheque till the resolution of the matter could be done. He further stated that on amicable discussion, the test CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 10 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:53:22 +0530 drive car was invoiced to the complainant.
12. The statement of accused No. 3 Ms. Neetu Rishi u/s. 313 Cr.P.C was recorded on 24.04.2023 wherein she stated that she was a sleeping partner and did not know about the day-to-day affairs of the firm. She further stated that she had not received any legal notice.
13. The statement of accused No. 4 Sh. Ashok Rishi u/s. 313 Cr.P.C was recorded through VC in the presence of the Ld. counsel for the accused on 14.12.2023 wherein he stated that the undated cheques were issued by his son as security towards the money deposited by the complainant for purchasing one Skoda Octavia Car. He further stated that since the delivery was delayed the complainant had taken possession of one demo car. He further stated that he had received any legal notice and that once the complainant had communicated to them that he was interested in keeping the demo car, an amount of Rs.50,000/- was to be adjusted towards the cost of the registration of the car, invoice was raised against the complainant with respect to the demo car. He further stated that the insurance of the demo car was also purchased by them, and the complainant had sent his ID proofs through WhatsApp for registration of the car, however the complainant had deleted the text messages. He further stated that they were not liable to pay to the complainant as they had raised the bill/invoices of the demo car and given the possession of the same to the complainant. He further stated that when they asked for return of the security cheque, the CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 11 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:53:28 +0530 complainant stated that he would return the same, however in the meanwhile the complainant filed the present complaint against them.
14. The accused No.2 Sh. Abhinav Rishi had examined himself as a witness u/s. 315 CrPC on 20.04.2024 wherein he had stated that the complainant had booked a car Skoda Octavia through the SPA holder in their show room in the year 2018. He further stated that he did remember the exact amount, but the complainant had paid either Rs.50,000/- or Rs.1,00,000/- as booking amount towards the purchase of the car and they had also received the loan amount within 5-7 days in the bank account of the accused firm. He further stated that apart from the abovesaid payment, some small amount was also remaining to be paid by the complainant. He further stated that the accused firm was not able to arrange the exact variant/model of the car as the same was not available with the Skoda company. He further stated that their dealership with the Skoda company was undergoing some issues and after a month or so, their dealership with the company had ended. He further stated that thereafter he had contacted Sh. Anil Wadhwa in the month of November 2018 and told him that they would either refund the entire amount or give the delivery of the car. He further stated that thereafter complainant together with the SPA holder had come to their office 2-3 times and he gave them 2 blank signed undated cheques as security to inculcate faith in the complainant that he would return the money to him. He further stated that he did not remember today but he had offered a CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 12 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:53:33 +0530 demo car Skoda Octavia of the same company but different variant to the complainant which was around 3-4 months old. He further stated that they asked complainant to use the car and, in the meanwhile, he assured the complainant that he would arrange a new car or have a further discussion with them in the next meeting. He further stated that since he was a resident of Bilaspur, he told the complainant that when he would return to Delhi next time, he would come up with a definite plan and he had been in touch with complainant telephonically. He further stated that when he came to Delhi, the next time in month of November-December 2018, he could not come up with a plan and he offered the complainant to keep the demo car if there was no issue with the same, as they have been driving the same for 10-15 days. He further stated that the complainant and the father of the complainant agreed for the said arrangement and thereafter they raised an invoice in the name of the complainant and also purchased an insurance policy for the said car in the name of the complainant, he further stated that it was mutually agreed that he would give the registration number to the complainant along with Rs.50,000/- which was refunded to the complainant. He further stated that the above stated arrangement was also part of the email that he had sent to the complainant and the same was duly acknowledged. He further stated that he could not get the registration number and also could not refund the amount of Rs.50,000/- within the stipulated period of 1 year. He further stated that he personally met the father of the complainant in Delhi somewhere in early 2020 as their dealership was closed and CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 13 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:53:40 +0530 their business was shut down. He further stated that the cheques they had given as security were presented for payment without their knowledge and any intimation. He further stated that when the demo car was handed over to the complainant, they had asked for return of the cheques and the complainant told them that he would return the same. He further stated that when he (DW-1) met the father of complainant, he asked me to refund the amount and stated that he had filed a case against him (DW-
1). He further stated that in the month of January-February 2020, his father asked the father of the complainant to give the details for the purpose of registration number and he had also asked the father of the complainant as the cutoff date of 31.03.2020 was nearby. He further stated that he received the details on WhatsApp from the father of the complainant and the same were deleted instantly. He further stated that no details were provided to them, and the time lapsed. He further stated that the registration of the vehicle was still going on in the State of Assam as it did not come under purview of Vaahan as the registration was manually done. He further again urged the father of the complainant to provide the details as he could have registered the vehicle in the State of Assam, but no details were provided. He further stated that he had no liability today as no details were provided by complainant or his father for registration of the vehicle. He further stated that he was always willing to register the vehicle if the details of the complainant would have been provided to him. He further stated that he had not repaid the amount of Rs.50,000/- till date. He further stated that the WhatsApp chat with the father of the complainant dt.CT Cases 2527/2019
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2024.06.05 14:53:44 +0530 29.03.2020 supported with a certificate u/s. 65 B Indian Evidence Act, 1872 was Ex.DW1/1 (Colly) (2 pages).
15. DW-1 was cross-examined on 20.04.2024 and in his cross examination. he was shown Ex.CW1/2 and after seeing the same, he had stated that the same was issued by the accused firm. He was shown Ex.CW1/3 email dt. 23.11.2018 and after seeing the same he had stated that he had sent the same. Witness was shown Ex.CW1/4 sales invoice dt. 18.12.2018 and after seeing the same he had stated that the same was issued by the accused firm. Witness was shown Ex.CW1/5 email dt. 27.12.2018 written by complainant to accused no.2 and after seeing the same he stated that it was received by him. Witness was shown Ex.CW1/6 cheque bearing No.002036 and after seeing the same he stated that only the signature belongs to him, the other details had not been filled by him. Witness was shown Ex.CW2/1 cheque bearing No.002037 and after seeing the same, he stated that only the signature belongs to him, the other details had not been filled by him. He further stated that no form was required to be filled for the purpose of registration of the car. He was asked to show any document to support his statement that he had asked for the details from the complainant in January-February 2020 to which he stated that there was no such document. He voluntarily stated that he had asked for the same telephonically. He was further asked that was it correct that Ex.DW1/1 was dt. 29.03.2020 when the entire country was under lockdown, and it was practically impossible to get a vehicle registered before 31.03.2020 which was the last date CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 15 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:53:52 +0530 for registration to which he stated that it was incorrect. He voluntarily stated that there were lakhs of registration in the entire country and records can be checked online. He admitted that he had not placed documents regarding registration of even single vehicle between 29.03.2020 and 31.03.2020 on record, he further stated that he could produce the same and his own dealership had registered several vehicles during the aforesaid period. He denied the suggestion that the entire cost price of booked vehicle i.e. Rs.19,46,901/- was paid by the complainant to the accused firm at the time of booking. He voluntarily stated that it was not given at the time of booking, they had received the amount in the next date of 5-7 days of the booking date. He admitted that the date of delivery of vehicle was promised on day of first navratri i.e. 10.10.2018. He further admitted that he had received the entire price of the booked car i.e. Rs.19,46,901/- before the aforesaid date and he voluntarily stated that the amount excluded the RTO and insurance. He further admitted that he had not shared the copy of insurance policy with the complainant and his team had done the same. He further admitted that he had not placed copy of the insurance policy on record. He further stated that he faintly remembers that the dealership with Skoda company was ended in mid of November 2018, again said first week of December 2018. He admitted that he had not issued any written communication to the complainant or his father to inform that accused firm had lost Skoda dealership. He further stated that he had tried to communicate with complainant and his father regarding the registration of cars in Assam, but he did not get CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 16 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:53:59 +0530 any response from them. He admitted that he has no document or material on record to prove the aforesaid fact. He further stated that he had closed the workshop at C-42, Wazirpur Industrial Area, New Delhi-110052 on 07.02.2020, he further stated that he was never in Delhi permanently, he was always a resident of Bilaspur. He admitted that to his knowledge, the car given to the complainant was not registered till date. He further admitted that a vehicle cannot be plied on road without registration. He denied the suggestion that it was agreed between the complainant and him that if he failed to register the car and get the insurance policy of the car and failed to refund the amount of Rs.50,000/-, he would return the entire amount of Rs.19,46,901/-. He further denied the suggestion that he had given the cheques in question Ex.CW1/6 and Ex.CW2/1 as security in case he fails to pay the aforesaid amount. He admitted that Sh. Atul Wadhwa had filed an appeal bearing RFA No.312/2020 against the judgment of Civil court dt. 27.08.2020 before the Hon'ble Delhi High Court. Witness was confronted with the certified copy of the aforesaid appeal and two document Annexure A-27 and A-28 and he admitted that they are the same copy of the appeal and the certified copy of the appeal was then Ex.DW1/C1 (Colly) (1-75 pages).
16. Thereafter on 20.04.2024, Ld. counsel for the accused persons had stated that accused person did not wish to lead DE and case was put for final argument.CT Cases 2527/2019
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2024.06.05 14:54:04 +0530 ARGUMENTS ADVANCED ON BEHALF OF THE PARTIES
17. Sh. Praveen Kumar Aggarwal, Ld. for the complainant has argued that the complainant had booked a four-wheeler vehicle namely Skoda Octavia Style 1.8 TSI AT pearl white in the month of September 2018 with the accused firm and the same was promised to be delivered on 10.10.2018. Ld. counsel further argued that the entire price of the car i.e. Rs.19,46,901/-
was paid to the accused firm wherein Rs.1,00,000/- was given in cash and for the remainder Rs.18,46,901/- was availed in the form of bank loan. Ld. counsel further argued that the accused persons had issued the cheques in question in discharge of the aforesaid liability as neither the aforesaid car was delivered nor the demo car, which was given as a stop gap arrangement, was registered. Ld. counsel has further argued that complainant has proved all the necessary ingredients of the offence u/s. 138 NI Act and has prayed that the accused be convicted of the offence alleged against him.
18. Per contra, Ms. Baishali Bose, Ld. Counsel for the accused has argued that though it is admitted that the booked vehicle could not be delivered to the complainant within time, however the demo car was sold to the complainant against the invoice, and it was not merely given. Ld. counsel has further argued that in the aforesaid invoice, it was clearly mentioned that there would be no return or exchange and CGST/SGST were also paid. Ld. counsel has further argued that the legal notice was not served CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 18 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:54:09 +0530 upon the accused persons, and it was not mentioned in the email dt. 23.11.2018 that the complainant would be entitled to present the cheques for payment in case the accused persons failed to deliver the car or to refund the booking price to the complainant. Ld. counsel has argued that there is no liability on part of the accused persons towards the complainant and has prayed that the accused persons be acquitted of the offence alleged against them.
POINTS OF DETERMINATION
19. The following points of determination arise in the present case:
A. Whether the complainant has successfully proven the facts which would raise the presumption u/s. 118 r/w Section 139 of NI Act by proving that the cheques in question bears the /signature of the accused?
B. If yes, whether the accused has been successful in raising a probable defence?
THE APPLICABLE LAW
20. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first. Now, Section 138 Negotiable Instrument Act provides as under:
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2024.06.05 14:54:14 +0530 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 with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that 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 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 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 CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 20 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:54:19 +0530 of the said notice. Explanation -- for the purposes of this section, "debt or other liability" 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 the period of its validity whichever is earlier; (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 30 days of the 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 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 CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 21 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:54:26 +0530 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 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 CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 22 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:54:32 +0530 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.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposes an evidentiary burden and not a 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 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.
CT Cases 2527/2019Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 23 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:54:38 +0530 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 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 now the presumptions under Section 118 (a) and Section 139 will not come to the aid of the complainant.
Mode of Proof: The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration, and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should prove the nonexistence of the consideration and debt by leading direct evidence CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 24 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:54:44 +0530 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 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.
CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 25 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date: 2024.06.05 14:54:49 +0530 FINDINGS OF THE COURT Points of determination number A:
21. The accused persons during the trial has neither disputed that the cheque in question i.e., Ex.CW1/6 and Ex. CW-2/1 were drawn on an account maintained by the accused firm nor the signature upon the same does not belong to accused no. 2. Once the signature upon the cheque in question has been admitted by the accused persons either expressly or impliedly, the presumption u/s. 139 NI Act becomes operative in favour of the complainant. In another words, it is presumed that the holder of a cheque received the cheque of the nature, as mentioned in Section 138 NI Act, for the discharge, in whole or in part, of any debt or other liability.
22. Accordingly, the point of determination number A is decided in the affirmative.
Points of determination number B:
23. Once the presumption is raised, the burden of proof shifts upon the accused to prove otherwise. It is trite law that the accused does not need to necessarily lead positive evidence in his or her favour, she can shift the said burden by blowing holes in the story of the complainant. Reliance is placed upon the judgment of Hon'ble Apex Court passed in Bharat Barrel and Drum Vs. CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 26 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:54:54 +0530 Amin Chand Pyarelal (1999) 3 SCC 35. It is further pertinent to note that the standard of proof required to rebut the presumption u/s.139 NI Act is that of "preponderance of probabilities" and at the same time, the complainant is required to prove its case beyond the shadow of reasonable doubt.
24. Coming to the facts of the present case, Ld. counsel for the accused persons have argued that the accused persons have not received the legal notice, hence the complaint is not maintainable. On this aspect, it would be relevant to discuss the judgment of Hon'ble Apex Court in "C.C. Alavi Haji Vs. Palapetty Muhammad & Anr AIR 2007 SC (SUPP) 1705", wherein it was held that "it is also to be borne in mind that the requirement of giving a legal notice is a clear departure from the rule of Criminal law, where there is no stipulation of giving of a notice before filing 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 u/s. 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of the complaint with the 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 u/s.138 of the Act, cannot obviously contend that there was no proper service of notice as required u/s. 138, by ignoring statutory presumption to the contrary u/s. 27 of the General Clauses Act and Section 114 of the Evidence CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 27 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:55:03 +0530 Act."
25. Coming to the facts of the present case, the accused persons had appeared before this court for the first time on 18.03.2020 and the copy of the complaint and documents were provided to the accused and despite the same, no payment was made by the accused persons after the expiry of 15 days thereon. Therefore, as per the observation of the Hon'ble Apex Court, the accused persons now cannot contend that legal notice was not served upon them. Therefore, the argument of non-service of legal notice upon the accused persons of the Ld. counsel for the accused persons is liable to be rejected.
26. The pivot of the entire controversy that now remains to be decided is that the accused persons have taken the defense that even though admittedly the car that was booked by the complainant was not delivered, the demo/loaner car was sold to the complainant vide invoice dt. 18.12.2018 Ex.CW1/4 and it was mentioned in the invoice itself that goods once sold will not be taken back or exchanged. It is further the argument of the accused persons that even though they were willing to execute the registration of the demo car in the name of the complainant, it was the complainant who never provided them any details required for the purpose of registration due to which the registration of the vehicle could not be done. On the contrary, it is the argument of the complainant that the demo car was not registered and could not have been registered by the accused persons in view of the judgment of the Hon'ble CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 28 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:55:08 +0530 Apex Court in MC Mehta Vs. Union of India, Writ petition (Civil) No. 13029 of 1985 wherein it was directed that no motor vehicle conforming to the emission standard Bharat Stage IV shall be sold or registered in the entire country with effect from 01.04.2020 and without the registration of the vehicle, the same could not have been plied on the roads and even otherwise the demo car was only a stop gap arrangement.
27. When the SPA of the complainant namely Sh. Anil Wadhwa was cross-examined by the accused persons, he had deposed that the offer of the loaner car was only a stop gap arrangement and no suggestion refuting the aforesaid fact was given to the CW-1. Therefore, the testimony of CW-1 had remained unrebutted during the trial. Furthermore, when the accused No.2 had examined himself u/s. 315 CrPC, he had deposed that when he was not able to deliver the booked vehicle to the complainant, he had offered the demo car of the same company but the different variant to the complainant and asked them to use the car and in the meanwhile he further assured that he would arrange a new car for them. From the testimony of the accused himself, it appears that the offer of the demo car was only a stop gap arrangement and was never meant to replace the original booking of the vehicle in question.
28. Furthermore, DW-1 deposed that when he had offered the complainant to keep the demo car, the complainant and his father had agreed for the same. No written communication has been proved by accused person to show that the complainant or CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 29 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:55:13 +0530 his father had accepted to keep the demo car.
29. The complainant has relied upon a letter dt. 15.10.2018 (Ex.CW1/2) issued by the accused firm, wherein the test vehicle Skoda Octavia Style Plus Automatic 1.8 TSI Meter reading 17,979 KMs was given to the complainant till the delivery of the booked vehicle. It is also pertinent to mention that the complainant has relied upon an email dt. 23.11.2018 (Ex. CW1/3) sent by accused No.2, which has been admitted by DW-1 in his cross-examination wherein the accused No.2 himself has stated that had requested the complainant to wait till 10.12.2018 as they were trying to resolve the issue by delivering the car or refunding the advance amount and also stated in the aforesaid email that they had tried their best to support them by giving a loaner car. Therefore, after perusing these two documents i.e. Ex.CW1/2 and Ex.CW1/3, it also becomes clear that the offer of the demo car was only a stop gap arrangement and was never meant to replace the original booking of the vehicle in question.
30. Be that as it may, even if it is to be considered that the loaner/demo car was meant to be given to the complainant in place of the originally booked car, DW-1 had admitted in his cross-examination that he could not get the registration of the vehicle within the stipulated 1 year of giving the demo car. The accused No.2 had examined himself as a witness as DW-1 and brought on record the WhatsApp chat (Ex. DW-1/1) with the complainant dt. 29.03.2020 together with a certificate u/s. 65B CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 30 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:55:18 +0530 Indian Evidence Act, 1872 wherein accused had stated that he had sought the registration details from the complainant and the same was not provided to him. It is pertinent to mention that the cheques in question was presented for payment and had returned dishonored on 02.01.2019 and 09.01.2019 respectively (vide return memos Ex.CW1/8 and Ex.CW1/9 respectively). Therefore, the aforesaid WhatsApp chat would not be relevant as it was later in point of time when the cheques were presented, and no prior communication has been proved by the accused in this regard. The complainant has also relied upon an email dt. 27.10.2018 addressed to the accused No.2 (Ex.CW1/5) wherein it was clearly stated that neither the booked vehicle has been delivered nor the registration of the demo car has been conducted despite passing of four months and payment of the entire consideration price. Moreover, the demo car was invoiced vide invoice dated 15.10.2016 (Ex. CW-1/2), whereas it is mandatory to register a vehicle within 7 days of taking the delivery of the vehicle. Reference can be made to rule 47 of the Central Motor Vehicle Rules, 1989, which reads "47. Application for registration of motor vehicles:
An application for registration of a motor vehicle shall be made in Form 20 to the registering authority within a period of seven days from the date of taking delivery of such vehicle, excluding the period of journey...". This period of 7 days was long expired when the accused had asked for the registration details on WhatsApp chat with the complainant dt. 29.03.2020 (Ex. DW-1/1).CT Cases 2527/2019
Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 31 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:55:24 +0530
31. Furthermore DW-1 further admitted in his cross-examination that there was no document on record to show that he had asked the details from the complainant regarding the demonstration of demo car in the month of January-February 2020. He further admitted that the insurance policy of the car has also not been placed on record. He further admitted in his cross-examination that there was no written communication to the complainant informing them that they have lost the Skoda Dealership and that they have closed their shop on 07.02.2020. Therefore, it is clear that no refund of the booking amount was made by the accused firm to the complainant. The demo car was not registered and as admitted by the DW-1, the vehicle could not have been plied on road without the registration. The accused further admitted in his cross-examination that the entire price of the booked car i.e. Rs.19,46,901/- was received by them.
32. In this regard, it would be apposite to refer to section 39 of Motor Vehicles Act 1988 "39. Necessity for registration. - No person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place or in any other place unless the vehicle is registered in accordance with this Chapter and the certificate of registration of the vehicle has not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner". Furthermore, section 40 of the said act makes it mandatory for the owner of the vehicle to register the vehicle. Therefore, the argument made by Ld. counsel for accused persons that since the demo car was sold to the CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 32 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:55:30 +0530 complainant, therefore the accused persons cannot be held guilty is not tenable, as the accused persons had failed to prove that they have got the registration of the demo vehicle within time and without the registration, the vehicle could not have been legally plied on road and used by the complainant.
33. It is also pertinent to note that the second cheque in question (Ex. CW-2/1) is in the name of 'HDFC Bank Ltd. Car Loan Account", which is an admitted fact that the same is in the name of the complainant, as CW-2 who was examined by the complainant as deposed that the cheque was deposited by Atul Wadhwa in his bank account number 02842970000035 which is the car loan account of Atul Wadhwa. Therefore, it was the complainant who was the ultimate beneficiary of the aforesaid cheque. Therefore, the prosecution of the accused persons on the basis of such cheque was perfectly legal and valid as it cannot be said that the complainant was not the payee or holder in due course within the meaning of section 138 NI act.
34. As far as the role of accused No.3 and 4 are concerned, although accused no. 3 and 4 have stated that they had no role in the transaction however they have not led any evidence to corroborate their defense. The reverse burden under section 139 NI Act cannot be said to have been rebutted only based on bald averments. Therefore, the requirements of either Section 141(1) NI Act have been met in the present case and the accused No.3 and 4 have failed to prove that they were not incharge of the day-to-day affairs of accused firm and CT Cases 2527/2019 Atul Wadhwa Vs. M/s. Grand Auto Capital & Ors. Page 33 of 34 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date:
2024.06.05 14:55:35 +0530 responsible for the management of the firm.
35. Therefore, the accused no. 1, 2, 3 and 4 have failed to raise any probable defence in the present case.
36. Accordingly, the point of determination No. B is decided in the negative in the present case.
CONCLUSION
37. In view of the aforesaid discussion, the accused number 1 company M/s Grand Auto Capital is held 'guilty' and consequently, accused no. 2 Mr. Ashok Rishi, accused no. 3 Mrs. Neetu Rishi and accused no. 4 Mr. Ashok Rishi are also held guilty and accordingly, accused no. 1, 2, 3 and 4 are hereby convicted of the offence under section 138 NI Act.
38. This judgment contains 34 pages. This judgment has been pronounced by the undersigned in the open court and each page bears the signatures of the undersigned.
39. Let a copy of the judgment be uploaded on the official website of District Courts, Saket forthwith.
Digitally
signed by
Announced in the open court RISHABH
RISHABH
TANWAR
on this Court on 05th Day of June 2024 TANWAR Date:
2024.06.05
14:55:42
+0530
(Rishabh Tanwar)
MM (NI Act)-07/South District,
Saket District Court
CT Cases 2527/2019
Atul Wadhwa Vs.
M/s. Grand Auto Capital & Ors. Page 34 of 34