Delhi District Court
Devi Gupta vs Birendra Kumar Jaiswal & Anr. (2008) 8 ... on 30 November, 2022
IN THE COURT OF MS. PADMA LANDOL,
METROPOLITAN MAGISTRATE, NI ACT DIGITAL COURT- 03,
NEW DELHI DISTRICT, PATIALA HOUSE COURT, NEW DELHI
M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD.
1. Complaint Case no. : 230/2021
2. Date of Institution of case : 06.01.2021 (As per Layers
Software)
3. Name of the complainant : M/s. BOP Pvt. Ltd Through
Director Arun Kumar
906, Naurang House,
21 KG Marg, New Delhi-110001
4. Name and address of Accused : M/s. Saya Cementation Ltd. &
Ors.
B-7 /45 Safdarjung Enclave
Extension, New Delhi-110029
5. Offence complained of : Section 138 NI Act
6. Plea of accused : Pleaded not guilty
7. Final Order : Acquitted
8. Date of judgment : 30.11.2022
-:JUDGMENT :-
1. The present complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") is filed by the complainant M/s. BOP Pvt. Ltd Through its Director Arun Kumar. The background of the CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 1 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:37:45 +0530 dispute herein is that the complainant had given unsecured loans to one M/s. Alisa Infratech Pvt. Ltd. The accused entered into a share purchase agreement with the said M/s. Alisa Infratech Pvt. Ltd. and also with one M/s. Baya Weaver Ltd. for buying their shares. The accused then towards the repayment of the said unsecured loans of M/s. Alisa Infratech Pvt. Ltd. gave the cheque in dispute dated 15.09.2020 for Rs. 2,37,30,000/- (Two Crore Thirty Seven Lakhs Thirty Thousand only) [Ex. CW-1/2] by way of partial discharge of the said loan.
2. Upon presentation, the cheque in dispute came to be dishonoured with remark "Payment stopped by Drawer" vide a return memorandum dated 20.11.2020 [Ex. CW-1/3]. The complainant eventually sent a legal demand notice dated 04.12.2020 [Ex. CW-1/5] to the accused through speed post vide postal receipts and internet generated tracking report [Ex. CW-1/4(colly)]. Despite service of the notice, no payment was received by the complainant. The accused having failed to make the payment within the statutory period of 15 days, the present complaint has been filed by the complainant against the accused company and its three Directors, namely, Mr. Vikas Bhasin, Ms. Anu Bhasin and Mr. Vipin Madan.
3. The complainant was directed to submit the original case documents (complaint, affidavit of pre-summoning evidence, cheque and annexed documents) with the Court, a condition precedent to the taking of cognizance of the complaint, as per SOP/Guidelines issued by the SCMSC Hon'ble High Court of Delhi for functioning of Digital Courts. Pursuant to the said compliance, vide order dated 20.03.2021, after being satisfied that prima facie ingredients of Section 138 NI Act are made out cognizance was taken and summons were directed to be issued against the accused no. 1 M/s. Saya CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 2 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:38:02 +0530 Cementation Ltd. and accused no. 2, Vikas Bhasin as complainant had dropped other two directors from the array of parties. Accused no. 1 and 2 (collectively referred to hereinafter as 'accused') entered into appearance on 07.08.2021 and accused no. 2 was admitted to bail on the same date. Upon seeing that there is no possibility of settlement, notice under Section 251 Cr.PC was framed and served upon the accused to which they pleaded not guilty and claimed trial. Accused no. 1 was represented by Vikas Bhasin (accused no. 2) as its Authorised Representative. Accused admitted the issuance of the cheque in dispute with the signature of accused no. 2, also admitted the receipt of legal demand notice. Both the accused have taken a common defence that they have already made the payment towards the cheque in dispute to the complainant by way of a Demand Draft. That the cheque in dispute was taken by complainant at the time of business dealing with them.
4. The accused was then granted liberty to move an application under Sec. 145(2) NI Act and upon the submission of the Ld. Counsel for complainant that he has no objection to the said application and also considering the facts of the case, the oral application stood allowed on the same day. The matter was then listed for recording of evidence through video conference through Cisco Webex Meet in compliance of the Project Implementation Guidelines 2020 laid down by Hon'ble High Court of Delhi and Video Conferencing Rules 2021 issued by Hon'ble High Court of Delhi dated 26.10.2021. On 25.05.2022, AR for complainant was cross-examined.
5. In Complainant's evidence, the AR for complainant (CW-1) tendered his affidavit in post summoning evidence (as the solitary witness) and relied upon following documents:
i) Original Authority Letter dated 02.12.2020: Ex. CW-1/1.
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ii) Master Data of accused company: Mark A.
iii) Original cheque in dispute dated 15.09.2020: Ex. CW-1/2.
iv) Bank return memo dated 20.11.2020: Ex. CW-1/3.
v) Postal Receipts and Internet generated tracking report: Ex. CW-1/4 (colly)
vi) Copy of legal notice dated 04.12.2020: Ex. CW-1/5.
6. In his cross-examination, the AR for Complainant (CW-1) deposed that the complainant company did not have direct commercial transactions with the accused company. Transactions were with M/s. Alisa Infratech Pvt. Ltd. (hereinafter referred to as 'Alisa') and M/s. Baya Weaver Ltd. (hereinafter referred to as 'Baya') on whose behalf the accused was supposed to make payment to the complainant. It is further deposed that he cannot recall if he has filed any document in the court showing transactions of complainant with Alisa and Baya. AR has further conceded that the transaction between the parties herein and if the cheque in dispute [Ex. CW-1/2] was issued for a legally enforceable debt is nowhere mentioned in his evidence by way of affidavit [Ex. CW-1/A]. He has however, submitted that he had told his counsel that amount was to be recovered from accused on behalf of Alisa and Baya. CW-1 further deposed that he was a director of both Baya and Alisa. It is deposed that complainant has the knowledge of share purchase agreement dated 30.03.2020 between the accused and Baya. The witness has also deposed that the cheque in dispute was not pertaining to Baya and was infact given to complainant by accused on behalf of Alisa. He has denied the suggestion that cheque in dispute [Ex. CW-1/2] was given by way of security. CW-1 has admitted that an amount of Rs. 2,37,30,000/- was credited in the account of the complainant through a Demand Draft issued by Baya somewhere in the year 2020. He has denied the suggestion that accused had CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 4 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:38:26 +0530 given a reply dated 04.12.2020 to the legal demand notice [Ex. CW-1/5] and complainant has concealed the same. Witness has further deposed that there is no other dispute between the parties. He has again deposed that one Arbitration matter is pending between the parties herein. Thereafter, the complainant closed its CE on the same date.
7. The accused were then examined under Section 313 Cr.PC wherein all the incriminating evidence was put to them. Both the accused have admitted purchase of shares of Baya and Alisa in the year 2020. It is stated that the cheque in dispute was given to Mr. Arun Kumar, AR for complainant by way of security and after few days a Demand Draft of the same amount was given to Mr. Arun Kumar in accordance with share purchase agreement. Cheque in dispute was supposed to be returned back, however, the complainant failed to return and misused the same. That they do not owe any liability to the complainant. It is further stated that the said Demand Draft was given to complainant by the accused and not Baya as opposed to what the AR for the complainant has deposed in his cross evidence. Further, Alisa has no role in the present transaction. Accused have also stated that since the dues were paid off, they issued stop payment instructions qua the cheque in dispute. That they have replied to the legal demand notice of the complainant which they have concealed from the court.
8. The accused then examined DW-1, Mr. Amit Khanna, General Manager Finance & Accounts, M/s. Saya Cementation Ltd. as its sole witness. Reliance was placed on-
i) Copy of Demand Draft dated 29.08.2020 at EX. DW-1/1 and
ii) Copy of Reply dated 16.12.2020 at EX. DW-1/2.
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In his examination-in-chief, witness deposed that in the last week of March 2020, a share purchase agreement was executed between accused company and two other companies i.e. Alisa and Baya for purchasing entire share holdings of the two companies. That accused did not owe any liability towards the complainant and payment was to be made by Baya. The cheque in dispute was given to complainant by way of security as accused did not have signing authority for Baya at that time. That it was agreed between the parties that as and when payment is made, cheque in dispute would be returned. Later, Baya made the payment through Demand Draft [Ex. DW-1/1], however, complainant did not return the cheque. Accused had even mentioned in its reply to legal demand notice that entire liability has been already paid.
9. In his cross examination, DW-1 has deposed that he is neither a signatory to the Share Purchase Agreement (SPA) nor a negotiator of the said agreement. It is further deposed that he has no commercial understanding behind the SPA, however, he is aware about the understanding as is borne from the executed document. DW-1 has further stated that under the terms of the SPA, companies namely Baya and Alisa were to be transferred with all their assets and liabilities. That he was not a part of the due diligence conducted in respect of the two companies for the purposes of takeover. Upon confrontation with the Due Diligence Report of Alisa [Ex. DW-1/C1], witness has deposed that amount payable by Alisa to complainant company as on 29.02.2020 is Rs. 23,11,62,464/-. He voluntarily deposed that he was telling the figure by only looking at the document, however, did not know the correctness of the figure. He further deposed that he does not remember if Alisa or the accused made any payment to the complainant between 29.02.2020 and 15.09.2020. Upon confrontation with the Due Diligence Report of Baya [Ex. DW-1/C2], witness has deposed that amount payable by CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 6 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:39:04 +0530 Baya to complainant company as on 31.12.2019 is Rs. 10.43 Crores at page no. 9. It is Rs. 10,33,44,896/- as on 31.12.2019 at page no. 30. Further, it is Rs. 4,51,98,198/- as on 22.01.2020 and amount is nil as on 27.02.2020. He voluntarily deposed that he was telling the figure by only looking at the document, however, did not know the correctness of the figure. CW-2 further deposed that cheque in dispute bears the signature of accused no. 2, Mr. Vikas Bhasin and also deposed that no tracking report has been filed along with reply to notice [Ex. DW-1/2]. Witness has denied the suggestion that the cheque in dispute was issued towards the part payment of outstanding loans of Alisa towards the complainant. He has further denied the suggestion that reply [Ex. DW-1/2] was never issued.
10. Final arguments have been heard at length. Complete record has been perused carefully.
In the final arguments, complainant has asserted its case for conviction against the accused essentially on the ground of having proved the cause of action against him, beyond all reasonable doubt. This is premised on the substantive proof of presentation of the cheques in dispute admittedly issued by the accused with the signature of accused no. 2, its return as dishonoured from the payee's bank upon presentation for encashment and non-payment by the accused of the legally enforceable debts within the statutorily prescribed period, despite service of legal demand notice. It is submitted by the Ld. Counsel for the complainant that there is no dispute qua the Share Purchase Agreement executed on 30.03.2020. In fact, DW-1 in his cross-examination has deposed that as per the terms of the Share Purchase Agreement, Alisa and Baya were to be transferred to the accused company along with its all assets and liabilities. Ld. Counsel further submitted that the cheque in dispute was issued towards partial discharge of liability owed by Alisa and not Baya.
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Further, accused has failed to bring any evidence to show that the amount paid through Demand Draft [Ex. DW-1/1] was the only liability owed to complainant. That even otherwise the said Demand Draft is dated 29.08.2020, whereas the cheque in dispute was issued much later i.e. 15.09.2020. Hence, no occasion arises to issue the cheque if liability was already discharged. Ld. Counsel has further stressed upon the point that the accused has miserably failed to rebut the presumption raised against him u/s. 139 NI Act read with Sec. 118 NI Act. He has further relied on the Due-Diligence Report of Alisa [Ex. CW-1/D1] to demonstrate that the Accused company owed a sum of Rs. 23,11,62,464/- (Rupees Twenty Three Crore Eleven Lakh Sixty Two Thousand Four Hundred and Sixty Four Only) to the Complainant Company as on 29.02.2020 on behalf of Alisa. He has further contended that accused no. 2 could have come in the witness box to depose and explain why the cheque in dispute was issued to the complainant, however, he failed to do so. Ld. Counsel has further objected to the mode of proof of reply [Ex. DW-1/2] contending that no tracking report has been attached with the same. He has thus prayed for conviction of the accused for the offence u/s 138 of NI Act. Ld. Counsel has relied on the following judgments:
i) Rangappa v. Sri Mohan, (2010) 11 SCC 441
ii) K.N. Beena v. Muniyappan and Another, (2001) 8 SCC 458
iii) K Bhaskaran v. Sankaran Vaidhyan Balan and Anr. (1999) 7 SCC 510
iv) G.L. Sharma v. Hemant Kishor, Crl.A. 1400/2011of Hon'ble High Court of Delhi
v) V.S. Yadav v. Reena, Crl. A. No. 1136 of 2010 of Hon'ble High Court of Delhi
11. Per contra, Ld. Counsel for the accused has prayed for dismissal of the complaint and acquittal of the accused on several counts:
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i) That the accused has been successful in dislodging the presumption raised against him u/s. 139 NI Act. Once the presumption is rebutted, onus shifts back to the complainant to prove its case beyond reasonable doubt.
ii) That the cheque in dispute was issued by way of security and payment towards the cheque has already been made. That is the sole reason for stopping payment of the cheque in dispute by giving instructions to the drawer bank.
iii) That the evidence affidavit of the complainant is silent on the aspect of nature of liability. Same is admitted by the CW-1 in his cross-examination.
However, for the first time in his cross-examination, CW-1 deposed that cheque in dispute was given by accused on behalf of Alisa. Further, complainant has not brought the Share Purchase Agreement in question or any other proof to establish the liability of accused to pay on behalf of Alisa.
iv) That the CW-1 has admitted the receipt of Rs. 2,37,30,000/- (amount equivalent to cheque amount in dispute) via Demand Draft. That complainant has failed to establish that the cheque amount was towards a separate liability.
v) That the accused was to make the payment through Demand Draft and in case of failure, the cheque in dispute was to be presented. However, even after the payment is admittedly made via Demand Draft, cheque in dispute has been misused.
vi) That not examining of accused no. 2 is not fatal to the defence of the accused since he is only vicariously liable and the primary liability is of the accused no. 1 company being the drawer of the cheque in dispute. Ld. Counsel for the accused has placed reliance on the case law in Narbada Devi Gupta Vs Birendra Kumar Jaiswal & Anr. (2008) 8 SCC 745 in support of his arguments.
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12. It is now pertinent to examine the factual matrix of the case in the light of the ingredients of the provision as produced herein:
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 provision 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
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(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.Explanation.--For the purposes of this section, "debt of other liability" means a legally enforceable debt or other liability.
13. The essential ingredients in order to attract Sec. 138 of NI Act, 1881 are:
i) Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;
(ii) Dishonor of cheque in dispute which must have been drawn on an account maintained by the accused;
(iii) Service of legal demand notice seeking payment of cheque amount within 30 days from the date of receipt of return memo;
(iv) Non-payment of cheque amount within fifteen days from the date of service of notice; and
(v) Filing of complaint within one month from the date on which cause of action arises.
14. Now, coming to the facts of the case in hand in the light of above mentioned legal principles. In the instant case, the issuance of the cheque in dispute [Ex. CW-1/2] by the accused, its presentation in the bank for encashment and subsequent dishonor due to the reason "payment stopped by drawer", is not disputed and is a matter of record, as proved by the return memo [Ex. CW-1/3]. The receipt of legal demand notice [Ex. CW-1/5] stands proved through the postal receipts [Ex. CW-1/4(colly)] and even otherwise admitted by the accused. Therefore, the presentation of the cheque in dispute, CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 11 of 23 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2022.11.30 15:40:08 +0530 its dishonorment and service of legal demand notice stand proved. It is also established that the cheque in dispute belongs to accused No.1 and even the signature on the same is admittedly of accused no. 2. Once these facts are established, a presumption of the cheque having been issued in discharge of a legally existing liability and drawn for good consideration arises by virtue of Section 118 (a) of the Negotiable Instruments Act. Once Section 139 of the NI Act comes into picture, the Court presumes that the cheque was issued in discharge, in whole or in part, of any debt or liability. At this stage, with the help of presumption under Section 139 of the Negotiable Instruments Act, the case of the complainant stands proved.
15. Since the presumption under Section 139 read with Section 118(a) of the NI Act is in favor of the complainant, it is now for the accused to rebut the same either by discrediting the veracity of material relied upon by the complainant or by leading positive evidence to probablise his defence on the touchstone of preponderance of probabilities as provided by the three Judge bench of the Hon'ble Supreme Court in Rangappa Vs Sri Mohan (2010) 11 SCC 441 and also in Rohitbhai Jivanlal Patel v. State of Gujarat & Anr. (2019) 18 SCC 106.
16. It is trite law that for rebuttal of the said presumption under Section 139 read with Section 118(a) of NI Act, accused need not even step into the witness box as he can rebut the same by placing reliance on the material brought on record by the complainant or even by raising presumptions of fact and law on the basis of material available on record. The accused has to make out a fairly plausible defence which is acceptable to the Court. Therefore, the standard of proof required from the accused to prove his defence is "preponderance of probabilities" and not beyond reasonable doubts. However, CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 12 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:40:16 +0530 at the same time, it is also to be remembered that bare denial of the existence of legally enforceable debt or other liability cannot be said to be sufficient to rebut the presumption and something which is probable has to be brought on record to shift the burden back to the complainant. The statutory presumption u/s. 118(a) NI Act reads as under:
118 Presumptions as to negotiable instruments. --Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration --that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration The statutory presumption u/s. 139 NI Act reads as under:
39. Presumption in favour of holder. --It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
17. Keeping these basic principles in mind, this Court shall now proceed to deal with the various defences taken by the accused and examine whether the accused has been able to rebut the presumption arising in favour of the complainant.
18. On behalf of accused, Mr. Amit Khanna, General Manager (Finance & Accounts) of accused no. 1 company has deposed as the sole witness. Accused no. 2 has chosen not to step into the witness box to depose.
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19. Hon'ble High Court of Delhi in V S Yadav vs Reena 2014 SCC Online Del 107 while discussing the evidentiary value of statement of accused recorded under section 313 CrPC and plea of defence under section 251 CrPC has laid as follows:
"5. It must be borne in mind that the statement of accused under Section 281 Cr. P.C. or under Section 313 Cr. P.C. is not the evidence of the accused and it cannot be read as part of evidence. The accused has an option to examine himself as a witness. Where the accused does not examine himself as a witness, his statement under Section 281 Cr. P.C. or 313 Cr. P.C. cannot be read as evidence of the accused and it has to be looked into only as an explanation of the incriminating circumstance and not as evidence. There is no presumption of law that explanation given by the accused was truthful. In the present case, the accused in his statement stated that he had given cheques as security. If the accused wanted to prove this, he was supposed to appear in the witness box and testify and get himself subjected to cross examination."
20. Therefore, in the instant case as well, the statement explaining incriminating circumstances against both the accused recorded under Sec. 313 CrPC read with Sec. 281 CrPC and further plea of defence under Sec. 251 CrPC both not being on oath and not being subjected to the scrutiny of cross examination cannot be considered to be a substantial or even a corroborative piece of evidence and therefore cannot by itself exude the liability of the accused.
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21. It is now imperative to see if the accused has been able to establish a probable defence through its witness DW-1 and/or if it has successfully pointed holes in the case of the complainant so much so that it dislodges the presumption raised against him.
22. It is contended by the accused that the cheque in dispute was given by the accused no. 1 company as security as at the relevant time, they did not have any signing authority for Baya. It was also decided between the parties herein that payment would be made through Demand Draft by Baya, however, in the event of default, complainant would encash the cheque. That since the payment was duly made through DD on 29.08.2020 by Baya, complainant misused the cheque by presenting the same.
23. On the aspect of the cheque in dispute being issued for security, merely because the cheque is a security cheque, the same is not a valid defence in the eyes of law, unless the accused is able to show that it did not have any legally enforceable liability to the extent of the cheque amount, on the date the cheque in dispute was presented.
24. It has been categorically stipulated by the Hon'ble Delhi High Court in Suresh Chandra Goyal v. Amit Singhal 2015 SCC OnLine Del 9459 that there is no magic in the word "security cheque", such that, the moment the accused claims that the dishonoured cheque (in respect whereof, a complaint under Section 138 of the Act is preferred) was given as a "security cheque", the Magistrate would acquit the accused. It is to be noted that whenever a cheque is issued, it is presumed to be issued in discharge of liability on part of the accused, though the liability may be an existing liability or a liability which would crystallize in future. If that were not so, there would be no CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 15 of 23 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2022.11.30 15:40:57 +0530 purpose of obtaining a security cheque from the debtor. A security cheque is issued by the debtor so that the same may be presented for payment, as and when the apprehended liability arises. Otherwise, it would not be a security cheque. Therefore, if a cheque is issued to secure any future liability arising towards the payee of the cheque for the purpose of which the cheque was issued by the drawer, the drawer cannot raise the defence that the cheque was issued for security purposes.
25. Further, the Hon'ble High Court of Delhi in Credential Leasing & Credits Ltd. Vs. Shruti Investments 2015 SCC OnLine Del 10061 has held that even a security cheque can form the basis of complaint under Section 138 of the NI Act, if on the date of the deposit of the post-dated security cheque, the debt of the accused stood crystallized. In the case in hand, accused has not brought any positive/direct evidence, more likely the cheque book/like document which would reflect entries qua date of issuance of cheque in dispute or any witness to prove the date of its issuance. However, it shall be seen in the succeeding paragraphs if the accused has been able to establish the circumstances to show the issuance of cheque in dispute as a security cheque.
26. The primary defence of the accused is that the liability in question was owed by accused on behalf of Baya and in lieu of that, Baya already gave a Demand Draft dated 29.08.2020 [Ex. DW-1/1] for Rs. 2,37,30,000/- to the complainant i.e. an amount equivalent to that of cheque amount in dispute. DW-1 has not been questioned on the said Demand Draft during his cross- examination. In fact, the credit of the said amount through the said Demand Draft is duly admitted by CW-1 (AR for the complainant) in his cross- examination. CW-1 has further stated that the DD was received on behalf of Baya somewhere in the year 2020. It has been contended by the accused that CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 16 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:41:16 +0530 since payment was already made in accordance with the Share Purchase Agreeement and when complainant failed to return the cheque in dispute, stop payment instruction was issued to its bank.
27. Accused has further brought a reply dated 16.12.2020 [Ex. DW-1/2] allegedly sent by him to the complainant in reply to its legal demand notice dated 04.12.2020 [Ex. CW-1/5]. It is argued that the accused had mentioned in the reply that the cheque amount has already been paid off through a Demand Draft and no liability existed, however, complainant concealed the same from court. Ld. Counsel for complainant objected to the mode of proof of the reply as tracking report is not attached with the same. It is to be noted that two courier receipts both dated 16.12.2020 addressed to the complainant company and to its counsel are attached with the reply. The receipts have not been challenged as to their genuineness. Further, there is no variance in the address of complainant mentioned in the reply and in the present complaint. Hence, under Sec. 27 of the General Clauses Act, 1897 it can be safely inferred that the reply was deemed to have been received by the complainant. Consequently, the objection raised by the complainant is rejected.
28. It is imperative to note that for the first time, the AR for the complainant during his cross-examination deposed that the liability in question was owed by accused on behalf of Alisa and not Baya. Till the time of cross- examination, no specific averment qua the nature of liability has come on record. The evidence by way of affidavit [Ex. CW1/A] at para 3 only mentions that the accused no. 1 through its director accused no. 2 issued one cheque bearing no. 000104 dated 15.09.2020 for Rs. 2,37,30,000/- for a valuable consideration in discharge of his liability in favour of the complainant, CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 17 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:41:31 +0530 however, complainant failed to elucidate the "nature of the liability". Said fact is admitted by CW-1 in his cross-examination.
29. Once the AR for the complainant is confronted with questions on the nature of liability, the complainant could have re-examined its witness or it could have produced the Share Purchase Agreement or any other like document to establish that the liability was owed by accused on behalf of Alisa instead of Baya, but no such exercise was undertaken by the complainant, despite ample opportunities. Once the accused has raised a probable defence by questioning the nature of liability, more specifically as to on whose behalf the accused owed the liability in question and in that regard brought a Demand Draft of the amount equivalent to that of cheque amount in dispute, it was imperative that the complainant take further steps to establish that the amount credited via Demand Draft was towards a separate and independent liability, however, complainant failed to make any effort in that regard and instead harped on the point that accused should have proved that Baya owed Rs. 2,37,30,000/- to complainant in lieu of which the Demand Draft was issued and that it did not owe liability on behalf of Alisa. It is an established law that whereas the accused only needs to set up a probable defence, the complainant has to prove his case beyond reasonable doubt. The case of complainant therefore has to stand on its own legs and prove its case independently and cannot insist for the accused to lead negative evidence.
30. At the stage of cross-examination of DW-1, the complainant brought Due Diligence Report of Alisa [Ex. DW-1/C1] and Due Diligence Report of Baya [Ex. DW-1/C2] which were allegedly prepared by an independent company at the instance of accused company. DW-1 was asked to read out the amount payable and recoverable from Alisa to complainant from page no. 26-
CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 18 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date: 2022.11.30 15:41:43 +0530
27 of Ex. DW-1/C1. To this, the DW-1 has replied that as per the said document, the amount due as on 29.02.2020 is Rs. 23,11,62,464. He denied remembering if accused or Alisa made any payment to complainant from 29.02.2020 till 15.09.2020 (date of cheque in dispute). Complainant simply produced the Due Diligence Reports of Alisa and Baya and questioned DW-1, who was neither the author of the document nor otherwise having knowledge of the same. Had DW-1 admitted the contents of the Reports, position would have been different but it is not so in the present case. The complainant could have examined the author of the said Reports to prove its veracity or bring any other witness at whose instance, the same was prepared or who can vouch for the correctness of its contents. Moreover, as rightly pointed out by the Ld. Counsel for the accused, the Due Dilegence Reports comes with a note that the author cannot comment upon the genuineness and correctness of the balances as they were not provided with any relevant document to confirm the figures. It is a settled law that merely exhibiting the document does not do away with the burden of proving the same. Non answering of question by DW-1 qua any payment made on behalf of Alisa from 29.02.2020 till 15.09.2020 on its own will neither prove the Due Diligence Report of Alisa nor establish the case of complainant when it is not supported by any other evidence on record. Even though DW-1 has admitted the Share Purchase Agreement and taking over of Alisa and Baya by accused with all their assets and liabilities, however, same will barely be of any assistance to the complainant when the evidence affidavit [Ex. CW-1/A] itself is silent on the aspect of nature of liability, more specifically on whose behalf, the liability was due and also the amount/extent of liability. The liability under Sec. 138 NI Act cannot be vague and ambiguous. It is the primary requirement of the complainant to clearly spell out who owed the liability. Complainant is supposed to know from whom he has to obtain money and clearly spell out the CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 19 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:41:58 +0530 same in the complaint. Complainant has been repeatedly saying that both Alisa and Baya owed liability to complainant and there seems to be cloud of uncertainity as to the specific liability qua the cheque in dispute. This can be seen from the cross-examination of AR for complainant and also from the fact that complainant has produced Due Diligence Reports of both Alisa and Baya and questions were put to DW-1 on both the Reports.
31. Arguendo, even if the Due Diligence Report of Alisa [Ex. DW-1/C1] is considered to be admissible, it still fails to support the case of the complainant for the reason that the outstanding payable and recoverable amount reflecting from page 27 is as on 29.02.2020, however, the cheque in dispute was presented on 19.11.2020. Complainant has not been able to establish that the amount due on 19.11.2020 was same as that on 29.02.2020 or atleast the amount to the extent of cheque in dispute was still due as on 19.11.2020. Moreover, Ld. Counsel for accused has contended that the Note 1 at page no. 30 of Due Diligence Report of Baya [Ex. DW-1/C2] is supporting the defence of the accused as it mentions that cheque of Rs. 3.26 Crore is yet to be presented by the complainant. Note 1 reads as "Further after 22 January 2020 cheques of Rs. 4.51 crore was issued to BOP Pvt Ltd out of which cheque of Rs. 3.26 Cr is not yet presented for payment."
32. Through the Demand Draft [Ex. DW-1/1] furnished, the accused has been able to raise a probable defence that the liability of the accused was on behalf of Baya and not Alisa. This lends corroboration from the reply of accused dated 16.12.2020 [Ex. DW-1/2], issuance of stop payment instruction to the drawer's bank and also the deposition of DW-1 who has supported the defence raised by the accused. The burden then shifted on to the complainant to prove beyond reasonable doubt that the Demand Draft was issued towards a CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 20 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:42:13 +0530 separate liability by Baya and liability in question is owed by accused on behalf of Alisa, but the complainant has very evidently failed in discharging this burden.
33. On the aspects of preponderance of probabilities, as already discussed above, the accused has to bring on record such facts and such circumstances which may lead the court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. The Hon'ble Supreme Court in Rohitbhai Jivanlal Patel (supra) and in various other rulings have time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under section 118 and 139 of the NI Act.
In the case at hand, keeping all the aspects in view, the defence put forth by the accused and rebuttal of presumption raised against him is much more than a mere denial when tested on the touchstone of preponderance of probability. In fact, it casts a strong shadow of doubt on the case of the complainant.
34. Further, the Hon'ble Supreme Court of India in Hiten P. Dalal Vs. Bratindranath Banerjee (2001) 6 SCC 16 has held-
"22.....Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 21 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:42:38 +0530 evidence showing the reasonable possibility of the non- existence of the presumed fact"
35. The Hon'ble Supreme Court of India in Krishna Janardhan Bhat Vs. Dattatraya G. Hegde (2008) 4 SCC 54 has highlighted the importance of delicately balancing the presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 NI Act. In the case at hand, the complainant has not been able to place any evidence to prove the liability of the accused on behalf of Alisa qua the cheque in dispute on the date of its presentation. Further, upon taking a holistic view of the allegations of complainant in consonance with the documents available on record and the legal principles governing the same, by no stretch of imagination can the court come to a conclusion none other than guilt of the accused. In such a scenario, it can be safely concluded that the accused has successfully raised a probable defence by casting a strong doubt upon the case of the complainant.
36. In any case, Negotiable Instruments Act envisages application of the penal provisions which needs to be interpreted strictly, therefore even if two views are possible in a matter, the Court should lean in favour of the view which is beneficial to the accused and the same position has been upheld in a catena of judgments. Therefore, even on this ground, the benefit of doubt is to be granted to the accused.
37. In view of the above discussion, therefore both the accused persons, namely, accused no. 1 M/s. Saya Cementation Ltd. and accused no. 2 Sh. Vikas Bhasin stand acquitted of the offence punishable under section 138 of Negotiable Instruments Act.
Announced in Open Court today on 30.11.2022.
CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 22 of 23 Digitally signed by PADMA PADMA LANDOL LANDOL Date: 2022.11.30 15:43:20 +0530 Digitally signed by PADMA PADMA LANDOL LANDOL Date: 2022.11.30 15:42:54 +0530 (PADMA LANDOL) MM (NI Act) Digital Court-03 New Delhi, PHC/Delhi/30.11.2022
Certified that this judgment contains 23 pages and each page bears my signatures. Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2022.11.30 15:43:09 +0530 (PADMA LANDOL) MM (NI Act) Digital Court-03 New Delhi, PHC/Delhi/30.11.2022 CC NO. 230/2021 M/S. BOP PVT. LTD. v. SAYA CEMENTATION LTD. Page no. 23 of 23