Delhi District Court
By This Order The Application Filed By ... vs Unknown on 1 October, 2012
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IN THE COURT OF CIVIL JUDGEI/MM, METROPOLITAN MAGISTRATE, NEW DELHI
DISTRICT, DELHI
Presided By : Sh. Apoorv Sarvaria, DJS
C.C. No:21/11
Sahara India Financial Corpn. Ltd. v Prakash Industries Ltd. & Anr.
Order on application u/s 66 of the Evidence Act
1. By this Order the application filed by the accused u/s 66 of the Evidence Act shall
be disposed of. By filing this application, the accused prays for issuing notice or
direction to the complainant to produce the original documents as set out in
Annexure A of the application as under :
Sr. No. Description of Documents
1 Agreement dated 08.10.1997 between the accused no. and
the complainant.
2 Irrevocable Guarantee dated 08.10.1997 executed by accused
no.2 in favour of the complainant.
3 Third Party Pledge Agreement dated 08.10.1997 executed by
12 Pledgers in favour of the complainant.
4 Certified true copy of the Resolution passed by the Board of
Directors on 09.08.1997 of M/s PLR Constructions Pvt. Ltd.
5 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s PLR Constructions Pvt. Ltd. in favour of the complainant.
6 Certified true copy of the Resolution passed by the Board of
Directors on 28.07.1997 of M/s Suvarna Marketing Pvt. Ltd.
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Sahara India Financial v Prakash Industries Ltd.
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7 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Suvarna Marketing Pvt. Ltd. in favour of the complainant.
8 Certified true copy of the Resolution passed by the Board of
Directors on 01.08.1997 of M/s Clean Securities Pvt. Ltd.
9 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Clean Securities Pvt. Ltd. in favour of the complainant.
10 Certified true copy of the Resolution passed by the Board of
Directors on 02.08.1997 of M/s Ripple Merchants Pvt. Ltd.
11 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Ripple Merchants Pvt. Ltd. in favour of the complainant.
12 Certified true copy of the Resolution passed by the Board of
Directors on 29.07.1997 of M/s Exotic Plants Farms Pvt. Ltd.
13 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Exotic Plants Farms Pvt. Ltd. in favour of the
complainant.
14 Certified true copy of the Resolution passed by the Board of
Directors on 30.07.1997 executed by M/s Immediate Portfolio
& Securities Pvt. Ltd.
15 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Immediate Portfolio & Securities Pvt. Ltd in favour of the
complainant.
16 Certified true copy of the Resolution passed by the Board of
Directors on 08.10.1997 executed by M/s Shree Labh Lakshmi
Capital Services Pvt. Ltd.
17 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Shree Labh Lakshmi Capital Services Pvt. Ltd. in favour
of the complainant.
18 Certified true copy of the Resolution passed by the Board of
Directors on 01.08.1997 executed by M/s Navdeep Foods
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Sahara India Financial v Prakash Industries Ltd.
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and Farms Pvt. Ltd.
19 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Navdeep Foods and Farms Pvt. Ltd. in favour of the
complainant.
20 Certified true copy of the Resolution passed by the Board of
Directors on 29.07.1997 of M/s Goodworth Fincap Pvt. Ltd.
21 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Goodworth Fincap Pvt. Ltd. in favour of the complainant.
22 Certified true copy of the Resolution passed by the Board of
Directors on 02.08.1997 of M/s Focus Securities & Credits
Pvt. Ltd.
23 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Focus Securities & Credits Pvt. Ltd. in favour of the
complainant.
24 Certified true copy of the Resolution passed by the Board of
Directors on 30.07.1997 of M/s Pareek Overseas Pvt. Ltd.
25 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Pareek Overseas Pvt. Ltd.
26 Certified true copy of the Resolution passed by the Board of
Directors on 04.08.1997 of M/s Rolls & Shafts (India) Pvt.
Ltd.
27 Irrevocable Power of Attorney dated 08.10.1997 executed by
M/s Rolls & Shafts (India) Pvt. Ltd. in favour of the
complainant.
28 Letter dated 08.10.1997 addressed by the accused no.1
company to the complainant delivering 33,86,400 pledged
shares along with proof of receipt endorsed by the
complainant.
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2. It is stated in the application that the original of these documents are in possession
and custody of the complainant. It is further stated that it is just and necessary that
this Court orders the complainant to produce the originals of these documents in
the possession of the complainant. In reply to the application, the complainant has
stated that the whole purpose of filing the application is merely to delay the
proceedings of this Court. It is further stated that the exhausted list of defence
witnesses has been filed by the accused which does not relate to the transactions
prior to the commission of the offence u/s 138 of the NI Act. Hence, the documents
that are sought to be produced are not relevant. It is further stated in the reply that
the documents that are sought to be produced by the accused are pertaining to the
agreement between the complainant and the accused dated 08.10.1997. However,
such documents are nowhere relevant to the present case since offence u/s 138 of
the NI Act was committed prior to the agreement dated 08.10.1997.
3. This Court has heard the submissions of Sh. Prem Kumar, Ld. Advocate for the
complainant and Sh. D.S. Purandara, Ld. Advocate for the accused. Sh. Prem
Kumar Ld. Advocate for the complainant has submitted that the cases filed u/s 138
of the NI Act are tried by special procedure as provided in the NI Act. He also
submitted that the accused should not be permitted to lead evidence in his defence
beyond the plea of defence he takes in cases filed u/s 138 NI Act He relied upon
the decisions in Rajesh Aggarwal v State 171 (2010) DLT 51, Mandvi Coop
Bank Ltd. v Nimesh B. Thakore (decided on 11.01.2010 by Supreme Court),
Rajneesh Aggarwal v Amit J. Bhalla 2001 (1) ACR 202 (SC) and Jauss
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Sahara India Financial v Prakash Industries Ltd.
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Polymers Ltd. and Anr. v Sawhney Brothers/MANU/DE/1693/2002. He
specifically referred to the examination of the accused recorded u/s 313 of Cr.P.C.
wherein accused had stated that the loan was to be encashed only if the
complainant was unable to recover the loan amount and interest by sale of shares
which he had pledged with the complainant. Sh. Prem Kumar submitted that the
evidence of the accused in his defence cannot go beyond the scope of defence that
he has raised in his examination u/s 313 of Cr.P.C.
4. On the other hand, Sh. D.S. Purandara, Ld. Advocate for the accused submitted
that the accused is always entitled to lead evidence in his defence and it should not
be restricted to the examination u/s 313 of Cr.P.C. He also submitted that even
otherwise, this Court should not decide upon the relevancy of the document sought
to be called for in view of the decision of the Hon'ble Supreme Court in Bipin
Shantilal Panchal v State of Gujarat and Anr. (2002) 10 SCC 529. He also relied
upon decision in Kashiram and Others v State of MP (2002) 1 SCC 71.
5. This Court has heard the submissions of the Ld. Advocate for the complainant as
well as Ld. Advocate for the accused applicant and perused the record.
6. The present application is filed u/s 66 of the Evidence Act which talks about notice
to be given by the party proposing to give secondary evidence to the party in whose
possession or power the document is. Hence, the applicant/accused in the present
case wishes to call for the original documents to be taken in his defence evidence,
the original being in custody of the complainant/respondent. However, the
complainant has, even before issuing notice u/s 66 Evidence Act, raised the C.C. No: 20/11 Sahara India Financial v Prakash Industries Ltd.
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objection as to the relevancy of the document sought to be produced by the applicant/accused. On the basis of the objections raised by the Ld. Advocate for the complainant, two points are required to be considered while deciding the present application. First, whether the accused is entitled to lead evidence in his defence beyond the explanation he gives under his examination recorded u/s 313 of Cr.P.C. The second point to be decided is that whether the documents sought to be called by the applicant/accused are relevant to the decision of the present complaint filed u/s 138 of the NI Act.
7. As regards the first point, a lot emphasis has been lead by Sh. Prem Kumar, Ld. Advocate for the complainant/respondent that in view of the decision in Mandvi Coop Bank Ltd. v Nimesh B. Thakore the accused cannot lead evidence beyond the defence he takes in his examination u/s 313 of Cr.P.C. He mainly emphasized on para 16 of the said decision of the Supreme Court. He also relied upon the decision of the High Court of Delhi in Rajesh Aggarwal v State. This Court has perused the decision of Ms. Mandvi Coop Bank Ltd. v Nimesh B. Thakore. The said decision does not, in any way, discuss the permissibility of leading evidence by the accused beyond the explanation given by the accused during his examination recorded under S.313 Cr.P.C. The relevant paragraph of Mandvi Coop Bank Ltd. which the Ld. Advocate for the complainant has specifically relied upon is reproduced here as under : ".................It may be noted that the provisions of sections 143, 144, 145 and 147 expressly depart from and override the provisions of the Code of Criminal Procedure, the main body of adjective law for C.C. No: 20/11 Sahara India Financial v Prakash Industries Ltd.
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criminal trials. The provisions of section 146 similarly depart from the principles of the Indian Evidence Act. Section 143 makes it possible for the complaints under Section 138 of the Act to be tried in the summary manner, except, of course, for the relatively small number of cases where the Magistrate feels that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily. It is, however, significant that the procedure of summary trials is adopted under section 143 subject to the qualification as far as possible, thus, leaving sufficient flexibility so as not to affect the quick flow of the trial process. Even while following the procedure of summary trials, the nonobstante clause and the expression as far as possible used in section 143 coupled with the nonobstante clause in section 145 allows for the evidence of the complainant to be given on affidavit, that is, in the absence of the accused. This would have been impermissible (even in a summary trial under the Code of Criminal Procedure) in view of sections 251 and 254 and especially section 273 of the Code . The accused, however, is fully protected, as under subsection (2) of section 145 he has the absolute and unqualified right to have the complainant and any or all of his witnesses summoned for crossexamination. Sub section (3) of section 143 mandates that the trial would proceed, as far as practicable, on a day to day basis and subsection (4) of the section requires the Magisrate to make the endeavour to conclude the trial within six months from the date of filing of the complaint. Section 144 makes the process of service of summons simpler and cuts down the long time ordinarily consumed in service of summons in a regular civil suit or a criminal trial. Section 145 with its nonobstante clause, as noted above, makes it possible for the evidence of the complainant to be taken in the absence of the accused. But the affidavit of the complainant (or any of his witnesses) may be read in evidence subject to all just exceptions. In other words, anything inadmissible in evidence, e.g. Irrelevant facts or nearsay matters would not be taken C.C. No: 20/11 Sahara India Financial v Prakash Industries Ltd.
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in as evidence, even though stated on affidavit. Section 146, making a major departure from the principles of the Evidence Act provides that the bank's slip or memo with the official mark showing that the cheque was dishonoured would by itself give rise to the presumption of dishonour of the cheque, unless and until that fact was disproved. Section 147 makes the offences punishable under the Act, compoundable".
8. The underlined portion was emphasized by the Ld. Advocate for the complainant. This paragraph deals with the contents of the affidavit that the complainant tenders in his evidence in view of Section 145 of the NI Act. It does not, in any way, touch the aspect as to what evidence the accused is entitled to lead or not entitled to lead in his defence. Moreover, this Court is unable to agree with the submission of Ld. Advocate for the complainant that in trials of complaints filed u/s 138 of the NI Act, the accused cannot raise his evidence beyond the statement made in his examination u/s 313 of Cr.P.C. It is a settled position that the examination of accused u/s 313 of Cr.P.C. is done for the purpose of enabling him to explain any circumstance appearing in evidence against him. Hence, the whole purpose of recording the examination u/s 313 of Cr.P.C. is to give notice to the accused of all the incriminating circumstances that have been led by the complainant and he should be given an opportunity to explain those circumstances. This does not mean that the accused will be required to disclose all his evidence during the recording of examination u/s 313 of Cr.P.C.
9. It has been held by different High Courts that a Court is not justified or authorised in examining the accused person for the purpose of ascertaining what witnesses he C.C. No: 20/11 Sahara India Financial v Prakash Industries Ltd.
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intends to call or what evidence he will give or what his defence is. (Queen Empress v Hargobind Singh (1832) ILR 14 ALL 242, Mohideen Abdul Kadir v Emperor (1904) ILR 27 Mad 238, QueenEmpress v R. Hawthorne (1891) ILR 13 All 3451, Gaya Singh v Mohammad Soliman (1901) 5 CWN 864 and King Emperor v Bhut Nath Ghose (1903) 7 CWN 345: See Sohoni's Code of Criminal Procedure, Volume 4, 20th Edition, page 1431)
10. Moreover, the relevant paragraph of Mandvi Coop Bank Ltd. relied upon by the complainant only deals with the affidavit of the complainant in his evidence and the observations in that paragraph are made only in that context. The complainant has failed to notice that later on, the Hon'ble Supreme Court in the same decision has made a distinction between the evidence of the complainant and the accused. In paragraph 32, the Hon'ble Supreme Court has observed as under while holding that it is wrong to equate the defence evidence with the complainant's evidence.
"32....The case of the complainant in a complaint under section 138 of the Act would be based largely on documentary evidence. The accused, on the other hand, in a large number of cases, may not lead any evidence at all and let the prosecution stand or fall on its own evidence. In case the defence does lead any evidence, the nature of tis evidence may not be necessarily documentary; in all likelihood the defence would lead other kinds of evidences to rebut the presumption that the issuance of the cheque was not in the discharge of any debt or liability. This is the basic difference between the nature of the complainant's evidence and the evidence of the accused in a case of dishonoured cheque. It is, therefore, wrong to equate the defence evidence with the complainant's evidence and to extend the same option to the accused as well.".
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11. Even in Rajesh Aggarwal, the High Court of Delhi has not put any restriction on the leading of evidence in defence by the accused even in case where the accused takes no defence. It was observed by Hon'ble High Court of Delhi in Rajesh Aggarwal as under in para 9:
"Where an accused takes no defence and simply says "I am innocent", there is no reason for the MM to recall the complainant or witnesses during summary trial and the evidence already given the complainant has to be considered sufficient and the trial court can ask the accused to lead his evidence in defence on the plea of innocence as the evidence of the complainant is already there." (emphasis added)
12. Hence, the submission of the complainant that the accused could not be permitted to give evidence in his defence beyond the explanation he gives in examination recorded u/s 313 of Cr.P.C. is wholly misconceived.
13. The second point for consideration for deciding this application is whether the documents sought to be relied upon by the applicant accused are relevant for the purpose of deciding the present complaint u/s 138 of the NI Act. The accused wishes to bring on record the documents relating to agreement between the complainant and accused on 08.10.1997. The complainant has raised an objection on the ground of irrelevancy since the alleged offence u/s 138 of the NI Act was completed before the agreement dated 08.10.1997 entered upon between the parties. For this, the complainant has also relied upon the decision in Shalimar Chemical Works and Jauss Polymers. On the other hand, Ld. Advocate for the C.C. No: 20/11 Sahara India Financial v Prakash Industries Ltd.
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accused has submitted that by bringing the said agreement and other documents on record, the accused is trying to raise a defence that by entering into the agreement dated 08.10.1997, there was a novation of the earlier agreement and hence the earlier liability of the accused company did not remain any more. Without going into the question whether the said defence raised by the accused is a probable defence for exempting the accused company from the liability u/s 138 of the NI Act, the evidence for the said purpose sought to be produced by the applicant/accused is relevant for the purpose of raising such a defence. Hence, this Court finds no reason to deprive the accused from raising such a defence for which the accused wishes to produce the documents as stated in its application in its defence evidence. In that view of the matter, the present application u/s 66 of the Evidence Act is allowed. The complainant/respondent is given notice to produce the original of documents as mentioned in Annexure A of the present application on or before the next date of hearing for the purpose of leading defence evidence of the accused. The application is allowed in the above terms.
Announced in the Open Court (Apoorv Sarvaria)
on 01st October, 2012 Civil JudgeI/MM, New Delhi District
New Delhi
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Sahara India Financial v Prakash Industries Ltd.