Delhi District Court
R. N. Choudhary vs . A. K. Singh Page No.1 Of 17 on 24 August, 2016
IN THE COURT OF HARVINDER SINGH,
METROPOLITAN MAGISTRATE - 06, NDD,
PATIALA HOUSE COURTS, NEW DELHI.
Ram Nain Choudhary ....................Complainant
Versus
A. K. Singh ....................Accused
C.C.No.1081/15 dated 20.11.2015
PS - Dwarka North
Under Section 138 of N. I. Act, 1881.
a) Sl. No. of the case : 38257/2016
b) Alleged date of commission of offence : 15.12.2013 Approximately
c) Name of the complainant : Ram Nain Choudhary
S/o Late Sh. Uday Raj Chaudhary
R/o Classic Apartments, B - 501,
Plot No.24, Sector - 12, Dwarka,
New Delhi.
d) Name of the accused : A. K. Singh
S/o Late Sh. Ram Ugrah Ram
R/o A - 603, Ishwar Aprtments, Plot
No.04, Sector - 12, Dwarka, New
Delhi - 110 075.
e) Offence complained of : Under Section 138 of N. I. Act,1881
f) Plea of accused : Pleaded not guilty
g) Final order : Acquitted
h) Date of such order : August 24, 2016
i) Brief statement of the reasons for decision :
1.Vide this judgment, I shall dispose off complaint for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 filed by complainant R. N. Choudhary against accused person namely A. K. Singh.
R. N. Choudhary Vs. A. K. Singh Page No.1 of 17 PRESUMMONING EVIDENCE & NOTICE
2. Presummoning evidence was lead by the complainant and after hearing the complainant, accused person was summoned for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 vide order dated 13.01.2014. After appearance of accused person, it was ensured that copy of complaint has been supplied. Notice was put to the accused person under Section 138 of The Negotiable Instruments Act, 1881 vide order dated 10.03.2014 to which he pleaded not guilty and claimed trial. Thereafter, accused person moved an application under Section 145 (2) of The Negotiable Instruments Act, 1881 which was allowed vide order dated 15.04.2014 and matter was fixed for complainant evidence. POST NOTICE EVIDENCE
4. Complainant examined himself as CW1 and adopted his affidavit Ex.CW1/1 of presummoning evidence as his examinationinchief of postnotice evidence and has deposed that he entered into a settlement deed Ex.CW1/A dated 26.05.2012 with the accused vide which it was settled and agreed that accused will pay him a sum of Rs.45,00,000/ and again accused entered into a supplementary settlement deed Ex.CW1/B with him whereby the schedule of payment was modified. Accused issued three cheques in question Ex.CW1/C1 to Ex.CW1/C3 in his favour of total Rs.25,00,000/ and assured him that the same would be honoured on their presentment. He deposited the cheques in question with his bank, but were returned unpaid vide memos Ex.CW1/D. He requested accused to pay the amount of cheques in question, but he did not give any satisfactory reply. He issued legal R. N. Choudhary Vs. A. K. Singh Page No.2 of 17 demand notice Ex.CW1/E to the accused vide speed post Ex.CW1/F, but the same was not responded, though, it got served upon the accused as per service report Ex.CW1/G. Accused failed to make the payment of cheques amount in question within statutory period and hence, committed offence punishable under Section 138 of The Negotiable Instruments Act, 1881. He also exhibited his complaint Ex.CW1/H in his evidence. CW1 was examined, crossexamined and was discharged.
5. CW2 Sh. P. K. C. has deposed that complainant is his father, he signed settlement deed Ex.CW1/A and supplementary settlement deed dated 31.07.2013 as witness. CW2 was examined, crossexamined and was discharged.
6. CW3 K. P. has deposed that he know both sides for many years. Both sides were partners and a settlement was arrived between them in month of May, 2012 and the settlement deed dated 26.05.2012 bears his signatures. CW3 was examined, crossexamined and was discharged.
7. CW4 A. Kumar has deposed in gist that both sides used to run a factory at his premises. In month of May, 2012, many persons came at his factory and he came to know later on that both sides have arrived at a settlement. He also joined them and accused told him that he has to make payment of Rs.70,00,000/ to the complainant. Settlement was arrived at in sum of Rs.45,00,000/ between both sides without any pressure. He witnessed settlement deed dated 26.05.2012 bearing his signatures at point 'C' and supplementary settlement deed dated 31.07.2013 bearing his signatures at point 'C' where accused promised to pay his liability within nine R. N. Choudhary Vs. A. K. Singh Page No.3 of 17 months. He used to collect money from the accused and would handover same to the complainant as they were not on talking terms. He used to return the cheques of accused whenever the complainant used to receive the payment of dishonored cheques. CW4 was crossexamined and was discharged.
8. Postsummoning evidence was closed on 02.06.2014.
STATEMENT OF ACCUSED
9. The statement of accused was recorded under Section 313 of The Code of Criminal Procedure, 1973 read with Section 281 of The Code of Criminal Procedure, 1973 separately. Incriminating evidence was put to him. Accused person denied all the allegations and stated that he is innocent and has been falsely implicated in this case. He stated that he had no liability towards the complainant. The first settlement deed and supplementary deed were prepared under force and threatening as about 10 - 12 persons were present at both respective times. Supplementary settlement was also got signed from him under pressure as he was not allowed to move his machines unless, he signs the settlement deed. He was forced to handover the cheques in question. He was assured by the persons present at that time that no action would be taken against him. He received legal demand notice in question, but he did not reply, since, he was assured that no action would be taken against him. He further stated that he is not personally liable to make the payment to the complainant. The primary liability was of the Param Switchgear Private Limited which was formed by them, which is still running and whose account could not be verified due to noncooperation of the complainant. He had already given amount of R. N. Choudhary Vs. A. K. Singh Page No.4 of 17 Rs.20,00,000/ to the complainant by taking various loans from the banks and is not liable to give any amount to the complainant. Accused opted to lead evidence in his defence, therefore, matter was fixed for defence evidence. DEFENCE EVIDENCE
10. Accused examined himself in defence after getting allowed an application under Section 315 of The Criminal Code of Procedure, 1973 alongwith three other witnesses. Accused examined himself as DW1, deposed his examination inchief vide affidavit Ex.DW1/A wherein in gist he has deposed that he and complainant belongs to same village. He had no business transaction with the complainant prior to formation of company by them under name and style of Param Switchgear Private Limited and he had not taken any loan from the complainant. The company in question went into losses as complainant was not giving proper attention to day to day affairs and business activities of the company. They used to get audited accounts of their company from chartered accountant Sh. Ashok Gupta who runs firm under name and style of Sh. Ashok Kumar Gupta & Company. The audit reports prepared by Sh. Ashok Gupta of their company being Ex.A1 to Ex.A4 bearing signatures of the complainant also upon them. Since company was running into losses, the complainant started putting pressure upon him to give profits as he was earning in property dealing business. Complainant pressurized him to sign settlement deed dated 26.05.2012 bearing signatures of the complainant, his two sons and other witnesses. The settlement deed Ex.CW1/A was got signed by the complainant and his sons under pressure. The complainant had not given him any R. N. Choudhary Vs. A. K. Singh Page No.5 of 17 loan prior to or on 26.05.2012. The complainant got issued the cheques in question of Rs.25,00,000/ from him without any consideration. He made payment of Rs.20,00,000/ to the complainant under pressure, threat and coercion. The supplementary settlement deed Ex.CW1/B was also got signed from him under threat and coercion. He and complainant invested Rs.2,00,000/ each in company by purchasing shares @ Rs.10/ per share. The complainant also runs business of security guards, therefore, keeps several security guards with weapons alongwith him. The correct financial position of the company is revealed from the returns filed by Sh. Ashok Gupta, Chartered Accountant on behalf of company. The company in question never earned profits equallent to Rs.25,00,000/ as per the claim of the complainant. The complainant is still one of the directors of Param Switchgear Private Limited and no partnership firm ever existed between him and complainant. DW1 was examined, crossexamined by complainant and discharged.
11. DW2 Manoj Kumar Singh and DW3 Anand Singh have deposed on similar lines as of DW1. DW2 and DW3 were examined, crossexamined by complainant and were discharged.
12. DW4 Ashok Gupta, Chartered Accountant has also tendered his examinationinchief in the form of affidavit Ex.DW4/A wherein it has been deposed that he is certified chartered accountant, he used to conduct the audits of Param Switchgear Private Limited. He filed income tax returns alongwith Balance Sheets of said company for financial years 2008 - 2009 to 2011 - 2012 and he used to give correct figures based upon the accounts maintained by the company in question. R. N. Choudhary Vs. A. K. Singh Page No.6 of 17 DW4 was examined, crossexamined by complainant and was discharged.
13. I have heard Ld. Counsels for both the sides and I have also perused the entire record of the case file and evidence on record.
APPRECIATION OF FACTS/CONTENTIONS/ANALYSIS & FINDINGS
14. To bring home conviction for offence punishable under Section 138 of The Negotiable Instruments Act, 1881, the complainant is obliged to prove :
(a) The cheque(s) was/were drawn/issued by the accused person(s) to the complainant on an account maintained by him/her/them/it with the bank for discharge, in whole or in part, of any debt or liability.
(b) The cheques(s) was/were presented to the bank within a period of six months or within period of its/their validity.
(c) The cheque(s) so presented for encashment was/were
dishonored.
(d) The payee/complainant of the cheque(s) issued a Legal
Demand Notice within 30 days from the receipt of information from the bank regarding dishonourment of the cheque(s).
(e) The drawer of the cheque(s) failed to make the payment within 15 days of receipt of aforesaid Legal Demand Notice.
(f) The complaint was presented within 30 days after the expiry of above 15 days.
15. At the outset, it is pertinent to mention herein that it is not in dispute R. N. Choudhary Vs. A. K. Singh Page No.7 of 17 that cheques in question were issued by the accused to the complainant, were dishonored on presentation, legal demand notice was issued and accused failed to make the payment of cheques in question despite service within stipulated statutory time.
16.1(a) The contentions which have been raised by the defence are that the cheques in question were given without any consideration under force and threat and further the documents Ex.CW1/A and Ex.CW1/B were got executed without any consideration under force and coercion. Accused has no liability towards the complainant and the liability if any existed was of Param Switchgear Private Limited. So, it is the case of defence that Ex.CW1/A and Ex.CW1/B were got signed from the accused under force, pressure and threatening and the cheques in question were given under force and threatening without any consideration for the same. 16.1(b) Per contra, it is contention of the complainant side that both complainant and accused belongs to same village, they started joint business, the complainant left business vide settlement deed Ex.CW1/A vide which it was agreed that accused shall make payment of Rs.45,00,000/ to the complainant. Another supplementary deed Ex.CW1/B was executed between the both sides vide which the cheques in question were issued. The accused has already made payment of Rs.20,00,000/ to the complainant, therefore, the liability stands admitted by the accused side, hence, accused should be held guilty in this matter. 16.2 Submissions of both sides considered.
First, it would be necessary to examine the documents Ex.CW1/A and R. N. Choudhary Vs. A. K. Singh Page No.8 of 17 Ex.CW1/B for decision of this matter. The document Ex.CW1/A is titled as settlement deed wherein in one of the column, it has been stated that both sides formed a company in name and style of Param Switchgear Private Limited and the complainant invested a sum of Rs.24,06,000/ in financial year 2008 - 2009. Thereafter, final figures of said company have been mentioned showing a profit of Rs.1,49,78,000/ during operations of the company from the financial year 2008 - 2009 to the financial year 2011 - 2012. It is also mentioned in one of the column that the accused side has agreed to take over the business for an amount of Rs.45,00,000/ payable to the complainant side. It is further mentioned in one of the column that the complainant shall not interfere in the business and shall relinquish his rights in said business after being paid fully as per agreement. Thereafter, the schedule of payment has been charted out in said document wherein payment is referred to have been made through six cheques each being of Rs.7,50,000/. If we examine Ex.CW1/B, it is stated to be a supplementary settlement deed in its title wherein in one of the column, it has been mentioned that accused has made payment of Rs.20,00,000/ in view of earlier settlement dated 26.05.2012. In one of the column, three cheques have been mentioned vide which the remaining payment of Rs.25,00,000/ has been sought to be made. The said three cheques are the same qua which the present complaint has been filed. Now, in view of above documents Ex.CW1/A and Ex.CW1/B, it is clear that both sides formed a company in name and style of Param Switchgear Private Limited and they entered into a sought of settlement vide said documents in respect of share of the complainant in said R. N. Choudhary Vs. A. K. Singh Page No.9 of 17 company.
16.3 Now, since the matter pertains to affairs of company, therefore, it would be relevant to discuss some of the provisions of The Companies Act, 1956 regarding transfer of shares and related transactions. Sections 82, 108 and 110 of The Companies Act, 1956 provides as under : "Section 82. Nature of [shares or debentures]. The [shares or debentures] other interest of any member in a company shall be movable property, transferable in the manner provided by the articles of the company."
"Section 108. Transfer not to be registered except on production of instrument of transfer. (1) A company shall not register a transfer of shares in, or debentures of, the company, unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transferee, has been delivered to the company alongwith the certificate relating to the shares or debentures or if no such certificate is in existence, alongwith the letter of allotment of the shares or debentures :
Provided that where, on an application in writing made to the company by the transferee and bearing the stamp required for an instrument of transfer, it is proved to the satisfaction of the Board of directors that the instrument of transfer signed by or on behalf of the transferor and by or on behalf of the transferee has been lost, the company may register the transfer on such terms as to indemnity as the Board may think fit :
Provided further that nothing to this section shall prejudice any power of the company to register as shareholder or debentureholder any person to whom the right to any shares in, or debentures of, the company has been transmitted by operation of law.
[(1A) Every instrument of transfer of shares shall be in such form as may be prescribed, and
(a) every such form shall, before it is signed by or on behalf of the transferor and before any entry is made therein, be presented to the prescribed authority, being a person already in the service of the Government, who shall stamp or otherwise endorse thereon the date on which it is so presented, and
(b) every instrument of transfer in the prescribed form with the date of such presentation stamped or otherwise endorsed thereon shall, after it is executed by or on behalf of the transferor and the transferee and completed in all other respects, be delivered to the company,
(i) in the case of shares dealt in or quoted on a recognised stock exchange, at any time before the date on which the register of members is closed, in accordance with law, for the first time after the date of the presentation of the prescribed form to the prescribed authority under clause (a) or within [twelve months] from the date of such presentation, whichever is later;
(ii) in any other case, within two months from the date of such presentation.].................................
[(1C) (C) any share which is held in any company by the Central Government or a State Government in the name of its nominee, except that every instrument of transfer which is executed on or after the 1st day of October, 1966, in respect of any such share shall be in the prescribed form.] (2) In the case of a company having no share capital, subsection (1) shall apply as R. N. Choudhary Vs. A. K. Singh Page No.10 of 17 if the references therein to shares were references instead to the interest of the member in the company.
(3) Nothing contained in this section shall apply to transfer of security effected by the transferor and the transferee both of whom are entered as beneficial in the records of a depository.] "Section 110. Application for transfer. (1) An application for the registration of a transfer of the shares or other interest of a member in a company may be made either by the transferor or by the transferee.
(2) Where the application is made by the transferor and relates to partly paid shares, the transfer shall not be registered, unless the company gives notice of the application to the transferee and the transferee makes no objection to the transfer within two weeks from the receipt of the notice.
(3) For the purposes of subsection (2), notice to the transferee shall be deemed to have been duly given if it is dispatched by prepared registered post to the transferee at the address given in the instrument of transfer, and shall be deemed to have been duly delivered at the time at which it would have been delivered in the ordinary course of post." 16.4 In view Section 82, 108 and 110 of The Companies Act, 1956, it is clear that shares in a company could be transferred as per the manner prescribed by articles of the company. So, now it would be relevant to discuss the provisions regarding same provided in the memorandum and articles of associations of Param Switchgear Private Limited Ex.CW1/D which though was produced by defence, but was admitted to be correct by the complainant also. It has been provided in the articles of association of Param Switchgear Private Limited in article no.2(c), 6, 7, 9, 10 and 12 as under : "2 (c). The right to transfer the shares of the Company is restricted in the manner and to the extent hereinafter appearing.
6. Save as herein provided, no transfer of shares shall be made or registered unless it be as between the joint shareholders interse or a transfer to his/her wife/husband and/or children without the previous sanction of the Board of Directors who may, in their absolute and uncontrolled discretion, subject to section 111 of the Act, decline to register any transfer of share without assigning any reason. The Board of Directors may also decline to register any transfer of shares if they are of opinion that it would not be desirable to allow the proposed transferee to become a member of or to increase the holding of the company.
7. Save as provided in section 108 of the Companies Act, 1956, no transfer of shares shall be registered unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferor and specifying the name, address and occupation of the transferee has been delivered to the company together with the certificate, or if no such certificate be in existence, the R. N. Choudhary Vs. A. K. Singh Page No.11 of 17 letter or allotment of such shares in accordance with the provisions of section 108 of the Act. The Transferor shall be deemed to remain a member in respect of such shares until the name of the transferee shall have been entered in the Register of Members in respect thereof.
9. A member intending to sell any shares shall give notice of his intention to the Board of Directors who shall offer such shares to all the members in proportion to their respective holdings in the company and may thereupon find one or more members willing to purchase the same. This shall be done within two months of receipt of such notice.
10. The price payable for the purchase of shares, unless otherwise agreed shall be their fair value which shall be determined by the company's auditors and the decision of the auditors of the company shall be binding on the seller and the purchaser.
12. The right of preemption set out in Article 9 to 11 above shall not be enforced in case of transmission or transfer of shares in favour of the heirs of a member." 16.5 Now, above being the legal provisions governing the transfer of shares in the company and the provisions in articles of association of company in question applicable to transfer of shares, if we even keep aside the contention of defence that the Ex.CW1/A and Ex.CW1/B were got executed under threat, force and coercion and cheques in question were given in pursuant to same, even then, the transfer of shares by the complainant to the accused is not according to Articles of Association of the company in question. The shares in question could have been transferred by complainant to the accused or to any other person(s) only as per the articles of association of company in question. So, shares of the company could not have been transferred by complainant to the accused vide Ex.CW1/A and Ex.CW1/B and such transfer is bad in law.
16.6 Now, lets proceed further with supposition that the transfer of shares according to articles of association of company have followed after honouring of Ex.CW1/A and Ex.CW1/B. The Sale of Goods Act, 1930 governs the rules of sale of goods including shares. So now, it would also be relevant to discuss some of the R. N. Choudhary Vs. A. K. Singh Page No.12 of 17 provisions of The Sale of Goods Act, 1930 relevant for this matter.
The sections 2, 4, 55 and 56 of The Sales of Goods Act, 1930 provides as under : "Section 2. Definition (7) "goods" means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming, part of the land which are agreed to be severed before sale or under the contract of sale."
"Section 4. Sale and agreement to sell. (1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one partowner and another.
(2) A contract of sale may be absolute or conditional.
(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.
(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred."
"Section 55. Suit for price. (1) Where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods.
(2) Where under a contract of sale the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract."
"Section 56. Damages for nonappearance. Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for nonacceptance."
So from above provisions, it is clear that shares are also treated as movable goods as per The Sale of Goods Act, 1930. The shares can also be sold as any other movable goods. Transfer of property in goods is essence of contract of sale of goods. A contract of sale of goods in general may be either a contract of sale i.e. executed contract or it may be only an agreement to sell i.e. executory contract. In a contract of sale of goods, the property in the goods is immediately transferred whereas in agreement to sell, the goods in property is transferred only after R. N. Choudhary Vs. A. K. Singh Page No.13 of 17 fulfillments of the conditions of the contract. In case of sale, the seller could sue the buyer for the price of goods whereas in agreement to sell, the seller being still owner of goods can dispose them off and sue the buyer for damages for nonacceptance. 16.7 Now, if we examine the documents Ex.CW1/A and Ex.CW1/B in light of provisions of Sale of Goods Act, 1930 as discussed above, Ex.CW1/A was only an agreement to sell being executed between both sides which is clear from one of its provisions that the complainant would relinquish all his rights in said business after being fully paid. So, the condition of payment in advance have been stipulated for relinquishment of right and for transfer of all the shares in the company. In that sense also, the cheques in question can be said to have been given as advance payment and on payment being so realized, the complainant would have been obliged to relinquish his share/shares in question. It is not a controverted fact that shares of the company in question have still not been transferred in name of the accused or any of his family members by the complainant.
16.8 In judgment of Hon'ble Supreme Court of India in matter of "M/s. Indus Airways Pvt. Ltd. & Ors. Vs. M/s. Magnum Aviation Pvt. Ltd. & Anr." decided on 07.04.2014, it is held as under : "2. The only question that arises for consideration in this appeal by special leave is, whether the postdated cheques issued by the appellants (hereinafter referred to as 'purchasers') as an advance payment in respect of purchase orders could be considered in discharge of legally enforceable debt or other liability, and, if so, whether the dishonour of such cheques amounts to an offence under Section 138 of The Negotiable Instruments Act, 1881 (for short, 'the N. I. Act'). The Delhi High Court in the impugned order has held that to be so."
"3. ........................... The said cheques were issued by way of advance payment for the purchase orders.................................."
"10. The Delhi High Court following its earlier decision in Mojj Engineering held that the issuance of a cheque at the time of signing such contract has to be considered against a R. N. Choudhary Vs. A. K. Singh Page No.14 of 17 liability, as the amount written in the cheque is payable by the person on the date mentioned in the cheque."
"19. The above reasoning of the Delhi High Court is clearly flawed inasmuch as it failed to keep in mind the fine distinction between civil liability and criminal liability under Section 138 of the N. I. Act. If at the time of entering into a contract, it is one of the conditions of the contract that the purchaser has to pay the amount in advance and there is breach of such condition then purchaser may have to make good the loss that might have occasioned to the seller but that does create a criminal liability under Section 138. For a criminal liability to be made out under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawl of the cheque. We are unable to accept the view of the Delhi High Court that the issuance of cheque towards advance payment at the time of signing such contract has to be considered as subsisting liability and dishonour of such cheque amounts to an offence under Section 138 of the N. I. Act. The Delhi High Court has traveled beyond the scope of Section 138 of the N. I. Act by holding that the purpose of enacting Section 138 of the N. I. Act would stand defeated if after placing orders and giving advance payments, the instructions for stop payments are issued and orders are cancelled. In what we have discussed above, if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability."
16.9 In view of the above decision of Hon'ble Supreme Court of India, it is clear that payment made through cheque as advance payment would not attract liability under Section 138 of The Negotiable Instruments Act, 1881. Since, it was stipulated by the agreement in question that only after payment being made, the complainant would be obliged to relinquish his shares and now since cheques in question have not been honoured, the complainant could have filed a civil suit for specific performance of contract or for damages, but, certainly the prosecution for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 is not maintainable even though cheques have been dishonoured. Otherwise also, as we have already discussed above, the transfer of share(s) in question have not been done as per the above cited provisions of The Companies Act, 1956 and the relevant provisions being made in the memorandum and articles of association of the company in question, hence, the prosecution for offence punishable under Section R. N. Choudhary Vs. A. K. Singh Page No.15 of 17 138 of The Negotiable Instruments Act, 1881 shall fail.
17. Now though, the complaint in question shall fail due to abovesaid reasons, in the opinion of the Court, the accused could not have been convicted in this matter otherwise also since it is a case of unaccounted/black money in which the complainant is also involved to the all possible extent. The document in question Ex.CW1/A mentions that the complainant has invested a sum of Rs.24,06,000/ in the financial year 2008 - 2009 whereas as per Ex.CW1/D1 (not controverted by complainant) total authorized share capital of the company was only Rs.25,00,000/ which was divided into Rs.2,50,000/ equity shares of Rs.10/ each to which both the complainant and accused agreed to take 20,000 shares each and put in capital of Rs.2,00,000/ each only. The documents Ex.CW1/D2, Ex.CW2/1 to Ex.CW2/4 reveals that either losses or marginal profits have been shown to have been made or gained by the company in question whereas in document Ex.CW1/A, the profits have been shown of huge amount contrary to said documents. Some of the balance sheets documents like Ex.CW1/D2 (collectively) bears even the signatures of the complainant. The complainant has cleverly deposed that he cannot say whether said documents bears his signatures or not, but if we compare the signatures upon them with the other admitted signatures of the complainant then they are similar one. Hence, it can be said that huge black money was invested in the business whereas only small amount was shown to have been invested. The company in question made huge profits, but in accounts it was shown to have been made losses or earn meager profits to not to pay any tax. It is admitted by the complainant that he has not filed R. N. Choudhary Vs. A. K. Singh Page No.16 of 17 any income tax return showing to have made such a huge investment and showing such great profits. Courts cannot come to rescue of such persons who have been violating rules and laws with such impunity, therefore, even otherwise the accused could not have been convicted in such a case for realization of illegal money. Reliance can be placed upon judgment of Hon'ble High Court of Delhi in matter of "Virender Singh Vs. Laxmi Narain and another" 2007 CRI. L. J. 2262 and judgment of Hon'ble High Court of Andhra Pradesh in matter of "Krishnam Raju Finances, Hyderabad Vs. Abida Sultana and Another" 2004 (2) DCR 1 for the same. Hence, accused person is entitled to benefit of doubt in this matter.
18. In view of the aforesaid discussions, accused person namely A. K. Singh is hereby acquitted for offence punishable under under Section 138 of The Negotiable Instruments Act, 1881.
Announced in the open Court on August 24, 2016.
(HARVINDER SINGH) M.M.03/PHC (NDD), New Delhi/24.08.2016 R. N. Choudhary Vs. A. K. Singh Page No.17 of 17