Delhi District Court
S/O Sh Raj Singh Rathi vs M/S Arun Dev Builders Ltd on 15 January, 2019
IN THE COURT OF MS. UPASANA SATIJA, MM03 (NI ACT)
SOUTHWEST DISTRICT: NEW DELHI
C.C No. 49897812016
CNR No. DLSW020008082014
Under Section 138 of Negotiable Instruments Act, 1881
In the matter of :
Yoginder Rathi
S/o Sh Raj Singh Rathi,
R/o H No. 53, D.D.A. SFS Flat,
Sector 22, Dwarka, New Delhi. .......Complainant
versus
1. M/s Arun Dev Builders Ltd.
F89/11, Okhla Phase II, New Delhi.
Also at:F1211, Chitranjan Park, New Delhi110019.
Through its ChairmancumManaging Director Sh Praveen Bhadwaj
2. Praveen Bhardwaj
R/o B8, Raju Park, Near Hanuman Mandir,
Devli, Delhi110062.
.......Accused
Offence complained of / proved : Under Section 138
Negotiable Instruments Act,
1881.
Plea of the accused : Pleaded not guilty
Date of Institution : 12.11.2014
Final Order / Judgment : Acquitted
Date of pronouncement : 15.01.2019
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J U D G M E N T:
1. The present complaint has been filed under Section 138/141/142 of the Negotiable Instruments Act, 1881. The facts in brief as averred in the complaint are that the accused no. 1 is the builder and developer of housing project and accused no. 2 is the Managing Director of the accused no. 1. Accused no. 2 and his representative showed rosy pictures about the future township project in Shahpura, Rajasthan on behalf of accused no.1 and convinced the complainant to book plots measuring 100 sq. Yards @ Rs.1,991/ per sq. Yard. The complainant booked three units in the name of his brotherinlaws Sh. Jitender Solanki and Sh. Om Solanki under a prelaunch scheme floated by the accused. The complainant, being the authorized representative of Sh. Jitender Solanki and Sh. Om Solanki, deposited Rs.50,000/ in each plot on 15.12.2006 vide registration no. 13403, 14220 and 14223.
The accused persons increased the plot area from 100 sq. Yard to 139 sq. Yard and as per the enhanced demand of the accused, the complainant made remaining payment on 25.07.2009. The complainant made total payment of Rs.3,40,401 for plot no. 764 vide regn. no. 13403, Rs.3,32,099 for plot no. 763 vide regn. no. 14220 and Rs.3,34,866 for plot no. 728 vide regn. no. 14223. After receiving the full payment, accused executed sale deed in favour of complainant on 03.09.2009 but did not hand over the physical possession of the plots and sought time for the 2 of 18 same after development of acquired land. Accused no. 2 assured that if accused no.1 failed to hand over the possession within 12 months from the date of execution of sale deed, then the complainant shall be entitled to get back the invested amount with a simple interest @ 12% per anum.
The accused failed to hand over the possession within time and the complainant filed criminal complaints against the accused persons and other directors of the accused no.1. Accused no. 2 approached the complainant and signed the MOU and issued one cheque bearing no. 070974 dated 01.06.2014 for a sum of Rs.12,00,000/ drawn on Punjab and Sindh Bank, Hemkunt Colony, G.N. Market, Greater KailashI, New Delhi. As per the MOU, accused assured the complainant to hand over the possession of all the plots till May 2014 but failed for the same.
The complainant again approached accused no. 2 and agreed to withdraw himself from booking on which, accused no.2 directed to present the cheque after two months. However, when the complainant presented the aforesaid cheque, it was dishonoured vide return memo dated 25.08.2014 for reasons 'Funds Insufficient'. The complainant allegedly then served legal notice dated 23.09.2014 on the accused demanding the cheque amount but in spite of service of said notice, the accused failed 3 of 18 to make the payment of cheque amount and hence, committed an offence under Section 138, Negotiable Instruments Act.
2. In support of allegations in his complaint, the complainant filed his evidence by way of an affidavit and placed on record the following documents:
(i) Copy of MOU (Ex. CW1/B).
(ii) Cheque bearing no. 070974 dated 01.06.2014 for a sum of Rs.12,00,000/ drawn on Punjab and Sindh Bank, Hemkunt Colony, G.N. Market, Greater KailashI, New Delhi (Ex.CW1/C).
(iii) Cheque return memo dated 25.08.2014 issued by ICICI Bank where the aforesaid cheque was presented for encashment reflecting the fact that the said cheque was dishonoured for the reason "Funds Insufficient" (Ex.CW1/D).
(iv) Legal Notice dated 23.09.2014 addressed to the accused on behalf of the complainant demanding the payment of cheque amount within fifteen days from the receipt of said notice (Ex.CW1/E).
(v) Postal Receipts reflecting the fact that the aforesaid legal notice was dispatched to the accused no. 1 and accused no. 2 on 23.09.2014 (Ex.CW1/F).
(vi) Internet Generated Postal Track Report in respect of letters sent through aforesaid postal receipts (Ex.CW1/G1, Ex.CW1/G2 and Ex.CW1/G3).
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3. Upon consideration of the complaint and documents annexed therewith and upon examination of the complainant, the cognizance of offence under Section 138 Negotiable Instruments Act, 1881 was taken and process was issued against the accused. Accused no. 2 appeared before the court and was admitted to bail and the matter was referred to Daily Continuous Lok Adalat. However, since the parties failed to arrive at any settlement, the matter proceeded further on merits.
4. Notice under Section 251 Cr.P.C. was framed against the accused no. 2 to which, he pleaded not guilty and claimed trial. He admitted the signatures on the cheque to be his and also admitted to have filled the particulars thereof. He further stated that the cheque in question was given to the complainant as security for the purpose of ensuring possession to the complainant. He further stated that the possession has already been handed over to the complainant but the complainant did not return the cheque and rather has misused the same. He denied owing any liability towards the complainant. The accused admitted to have received legal demand notice but denied having replied to the same and stated that he was talking to the complainant on phone.
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5. Since no one appeared on behalf of accused no. 1 despite service of summons and the Ld. Predecessor of this court framed notice against accused no. 2, it is presumed that the Ld. Predecessor proceeded against accused no. 1 in absentia.
6. Oral Application under Section 145(2), Negotiable Instruments Act was moved on behalf of the accused no. 2 and the same was allowed and the complainant was cross examined.
7. During his crossexamination, the complainant stated that he personally did not purchase any land from the accused company and that the land was bought in the name of his brotherinlaws Sh. Jitender Solanki and Sh. Shreeom Solanki. He further stated to be GPA holder for the said persons. He further stated that two GPAs were separately executed by Sh. Jitender Solanki and Sh. Shreeom Solanki and that the GPA in his favour was not registered but is notarized. He denied having filed copy of GPA but stated that he can produce the same. He denied remembering the dates of the GPAs. He further stated that Sh. Jitender Solanki purchased two plots and Sh. Shreeom Solanki purchased one plot and the said plots were registered in the name of said persons.
6 of 18 He denied that possession of said plots has been handed over to said persons. He further denied that fencing has been done on the said plots. He admitted that an MOU was signed between him and the accused but denied remembering its date. He further stated that the cheque in question was handed over to him at the time of signing the MOU. He denied that cheque in question was given to him as security cheque and stated that it was agreed that if by specific date 01.06.2014 the possession is not given to him, the cheque in question shall be encashed.
He further stated that he informed the accused company before presenting the cheque in question. He further stated that he presented the cheque as possession was not handed over. He denied that he can transfer the land back in the name of accused company and stated that registry done in name of Sh. Jitender Solanki and Sh. Shreeom Solanki is a fake registry as the land was never in the possession of the accused.
He denied that three plots are in his possession. He admitted that no written communication was made with the accused company for transfer of possession but stated that there was verbal communication with the cashier of the accused company namely Sh. Mrityu Kumar. He denied that there was no communication with the cashier and that he never used to visit the company or spoke to any of its 7 of 18 employees. He further stated that he had not given any notice in writing to the company for refund of the sale amount as it was a matter of forgery. He further stated to have filed complaint against the accused in PS Neb Sarai and the MOU was signed after the said complaint. He denied that accused owes no liability towards him.
8. The complainant chose not to lead any further evidence.
9. The accused no. 2 was examined in accordance with provisions of Section 313 Cr.P.C. During the said examination, he stated that the cheque in question was issued in favour of the complainant upon an understanding that it shall be returned to the accused company upon the complainant receiving the possession of property however, even upon receipt of possession the complainant did not return the cheque in question. He further stated that he is ready to pay the cheque amount if the complainant gets the aforesaid property transferred back in the name of accused company after registration. He further stated that even on cheque it is mentioned that the said cheque is a security cheque and the same shall be encashed only upon transfer of registry through power of attorney. He admitted having received the legal demand notice at the office of the accused company. The accused opted to lead evidence in his defence.
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10. Thereafter, at joint request of the parties, the matter was referred to mediation. However, since the parties failed to arrive at any settlement, the matter proceeded further on merits.
11. No evidence was led by the accused no. 2 in his defence.
12. Final Arguments were heard. During the final arguments, it was submitted by Ld. Counsel for the Complainant that all the ingredients of the offence under Section 138 Negotiable Instruments Act are made out. He submitted that the accused admitted to be authorized signatory and to have issued the cheque in question. He further submitted that the accused also admitted the receipt of legal notice. He further argued that since execution of GPA was not denied by the accused, it is deemed to have been admitted. He further submitted that accused also admitted and relied upon MOU Ex. CW1/B. He further pointed towards the fact that no suggestion was given to the complainant regarding his not having given any intimation to the accused company before presenting the cheque in question. He further argued that accused denied his liability on the ground that possession was handed over but he did not mention said fact at the stage of framing of notice and also, no document was produced nor any evidence was led by the accused regarding handing over the possession.
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13. On the other hand, Ld. Counsel for accused argued that to establish an offence under Section 138 NI Act, complainant must be a person who is entitled to hold the cheque under Section 8 of the NI Act whereas in the present case, there can be said to be no liability towards the complainant and he cannot be said to be the holder of the cheque. He further argued that the complainant stated to have purchased the plots in name of his brotherinlaws and said transaction is prohibited by the Benami Transactions Act. He further argued that as stated by the complainant, sale deed was not executed in his favour and also the copy of sale deed executed is not filed. He further argued that saledeed was executed in favour of Sh. Jitender Solanki and Sh. Om Solanki and possession has already been handed over to them but said persons never came forward nor was any complaint filed by them. He further argued that Ex.CW1/B explicitly mentions about refund formalities which were never completed by the complainant. He further argued that the cheque was not exhibited and the complaint is liable to be dismissed on that ground alone. He further argued that it is manifest from the back side of the cheque that the same was not issued against any liability existing at that time. He further argued that no power of attorney was executed by the owners in favour of complainant and also the owners did not perform the refund formalities. He further argued that since the cheque was not in discharge of any liability towards the complainant, it does not come within the 10 of 18 purview of Section 138 NI Act. The Ld. Counsel for accused relied upon judgment of Hon'ble Supreme Court of India in, M/s Indus Airways Pvt. Ltd. & Ors. v. M/s Magnum Aviation Pvt. Ltd. & Anr. (2014), in support of his arguments. Applicable Law and its application to present facts
14. To establish an offence under Section 138 of the Negotiable Instruments Act, the following ingredients are to be established by the complainant:
(i) Cheque must have been drawn by the accused on an account maintained by him with a banker.
(ii) Cheque must have been drawn for payment of any amount of money to another person for discharge, in whole or in part, of any debt or other liability.
(iii) Said cheque is returned unpaid by bank for the reason that either 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.
(iv) The cheque must have been presented to the bank within a period of 6 months from the date on which it is drawn or within the period of its validity, whichever is earlier. 11 of 18
(v) The payee or holder in due course makes a demand for payment by giving notice in writing to the drawer of the cheque within 30 days of receipt of information by him from the bank regarding the return of cheque as unpaid.
(vi) Drawer of the cheque fails to make the payment of the said amount to the payee or holder in due course of cheque within 15 days of said notice.
Section 142, Negotiable Instruments Act further requires the complaint under Section 138 must be made in writing by payee or holder in due course of cheque and such complaint must be made within one month from the date on which the cause of action arises i.e. within one month from the expiry of fifteen days time within which the accused is required to make the payment of cheque amount upon receipt of demand notice.
15. Now coming to the facts of the present case, it is not in dispute that the accused no.2 issued the cheque in question on behalf of accused no.1. It is further not in dispute the said cheque was returned unpaid for the reason "Funds Insufficient"; that the cheque was presented within the period of its validity; that upon information of dishonour of cheque, the complainant made a demand in writing for payment of 12 of 18 cheque amount within a period of thirty days from the receipt of information of dishonour and that the said notice was received by the accused.
Accordingly, ingredients (i), (iii), (iv), (v) and (vi) of the offence under section 138 are well established and not in dispute.
16. However, the Ld. Counsel for accused argued that the present case is not maintainable as the cheque in question was never exhibited. The perusal of cheque reveals that no exhibit mark was put on the cheque but the complainant filed his evidence by way of affidavit which mentions that the cheque in question was exhibited as Ex.CW1/C. The complainant tendered the said affidavit as his pre summoning evidence before the trial court and again relied upon document Ex.CW1/C. Merely not putting an exhibit mark will only amount to a technical defect. Further, no objection regarding the same was taken by the Ld. Counsel for accused at any earlier stage and is being raised at the stage of final arguments. Further, the accused himself had relied upon the cheque in question and also specific questions were put to him during his examination under Section 313 Cr.P.C. Accordingly, since the defect is in nature of technical defect and no objection was raised earlier, any objection at this stage is not tenable.
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17. Ld. Counsel for accused further argued that the complainant is not maintainable as there was no liability towards the complainant and the complainant had not filed GPAs executed by Sh. Jitender Solanki and Sh. Om Solanki in his favour. Accordingly, the complainant cannot be said to be holder of cheque in terms of Section 8 of Negotiable Instruments Act.
However, the accused admitted to have executed the MOU Ex.CW1/B wherein it is explicitly mentioned that the complainant is authorized for taking care of Registration no. 14223, 14220 and 13403 and since the possession of the plots had not been handed over, the cheque in question is being issued in favour of the complainant. The present complaint is under Section 138 of Negotiable Instruments Act and complainant, being the payee, was well within his right to file the same.
18. Further, the accused no.2 has averred that the accused did not owe any liability towards the complainant.
19. At this point, provisions of Section 118 read with Section 139 of the Negotiable Instruments Act become relevant which raises a presumption that the negotiable instrument was drawn for a consideration and that payee or holder in due course of cheque received the said cheque for discharge, in whole or in part, of any debt or other liability.
14 of 18 However, this is a rebuttable presumption. The burden of rebuttal lies on the accused. The standard of proof required is not as strict as is required to establish a criminal liability, and will be discharged on the basis of preponderance of probabilities.
Coming to the present case, averments have been made by the accused that the possession of property was transferred and accordingly, accused is not liable to make the payment. The burden of proving the said averments is on the accused however, no evidence was led by the accused to substantiate his averments.
20. However, for rebuttal of presumption under Section 139 Negotiable Instruments Act, it is not essential for the accused to lead direct evidence but the same can be done on the basis of material already brought on record. Accordingly, it is to be seen whether the accused has reasonably been able to rebut the presumption on the basis of material on record.
20.1. The complainant relied upon MOU Ex.CW1/B in order to establish the liability of the accused. Although the accused admitted to have executed the said document but it is mentioned in the said document itself that if the accused is unable to give the possession in respect of Registration no. 14223, 14220 and 13403 then the 15 of 18 accused will issue Rs.4 lacs each on 01.06.2014 after execution of Power of Attorney of each plot and the complainant will be required to arrange execution of all documentation. It was further mentioned in Ex. CW1/B that the accused is issuing the cheque in question in favour of the complainant and the complainant commits not to present the said cheque and will present the same only after fulfilling the refund formalities. As pointed by the Ld. Counsel for accused, no evidence was led by the complainant to show that he had completed the refund formalities.
20.2. Again, it is mentioned on back side of cheque Ex. CW1/C that it is issued as a security of Registration no. 14223, 14220 and 13403 and will be placed in bank after the transfer of registry through power of attorney.
21. Bare perusal of the MOU and back side of the cheque in question reflects that the cheque was given as security to ensure the possession in respect of Registration no. 14223, 14220 and 13403. Accordingly, liability of the accused was conditional and would have arisen only if the accused failed to hand over the possession by the date mentioned in MOU and then also only after the fulfilment of refund formalities by the complainant. The complainant denied having received the possession whereas the accused stated to have handed over the same. This is a disputed fact which neither party has been able to establish. Even if the statement of 16 of 18 the complainant that possession is not handed over is believed to be true, then also the complainant was required to complete certain refund formalities and then only, the liability of the accused would have arisen. Since no evidence was led by the complainant in this regard, it cannot be said that the complainant has been able to establish the existence liability of the accused towards him.
22. The standard of proof as required of the accused to rebut the presumption under S. 118 read with S. 139 Negotiable Instruments Act, 1881 is not beyond all reasonable doubts but the accused is required to raise a reasonable doubt through preponderance of probabilities. In view of the above discussion, I am of the view that accused has been able to sufficiently rebut the presumption raised against him.
23. Upon consideration of the facts of the case and evidence adduced, this Court is of the view that the Complainant has not been able to establish the guilt of the accused beyond reasonable doubts and accused has been able to sufficiently rebut the presumption raised in favour of complainant under S.118 read with S. 139 of the Negotiable Instruments Act, 1881.
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24. Accordingly, the accused is hereby acquitted of offence under Section 138 of the Negotiable Instruments Act, 1881.
Digitally
signed by
UPASANA
UPASANA SATIJA
SATIJA Date:
2019.01.17
15:42:26
+0530
Announced in the open Court
on 15th day of January, 2019 (UPASANA SATIJA)
MM03 (NI Act)/SouthWest
Dwarka/ New Delhi
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