[PRECEDENT] page no. 1 of Pages 23 IN THE COURT OF SH. [ENTITY] METROPOLITAN MAGISTRATE, KKD, EAST, NEW DELHI Complaint No. 7311/10 PS. Preet Vihar Sh. [ENTITY] S/o Sh. B.R. Sharma R/o 92, Samachar Apartment, Mayur Vihar Phase1, Delhi92 Complainant. Versus 1. Sh. [ENTITY] Managing director of Doors Transport Ltd S/o Late Sh. Moaji Ram Mittal, R/o W13/8 Western Avenue, Sainik Farm, New Delhi72 2. Smt. [ENTITY], Director of Doors Transport Ltd W/o Sh. [ENTITY], R/o W13/8 Western Avenue, Sainik Farm, New Delhi72 3. M/s Doors Transport Ltd W/76, D Sainik Farm, Anupam Garden, Delhi Accused. COMPLAINT U/[SECTION] OF THE [ACT] Offence complained of : U/[SECTION] [ACT] Date of commission of offence : 15.08.2007 Plea of Accused : Not guilty Complaint filed on : 12.09.2007 Final Arguments heard & Concluded on : 12.12.2011 Date of decision of the case : 22.12.2011 Final order : Conviction of accused no. 1 & 3. Acquittal of accused no.2 [PRECEDENT] page no. 2 of Pages 23 BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. By way of the present judgment, this court shall decide the complaint case U/[SECTION] [ACT] (as amended up to date) filed by the complainant Sh. [ENTITY], against the accused persons [ENTITY], [ENTITY] being the Directors of M/s Doors Transport ltd and M/s Doors Transport ltd.
2. The facts in brief necessary for the disposal of the present case are that, complainant and accused no.1 & 2 were known to each other as accused persons used to have business dealings with the younger brother of the complainant. That complainant gave a personal loan of Rs.6,00,000/ to the accused persons on their demand. It is also submitted in the complaint that after advancing the amount complainant on a number of occasions accepted the request of the accused persons not to present their cheques for encashment as accused were into financial losses and on that accused persons also used to issue fresh cheques after taking old cheques back. Finally on 03.11.2006, a meeting was arranged at B253, Vivek Vihar, Delhi in the presence of accused persons, their manager, complainant, complainant's brother Sh. [ENTITY] and his wife and on that meeting accused persons were agreed to finally settle their liability, In pursuant to the said settlement manager of the accused persons handed over two post dated cheques no. 592751 dated 01.01.2007 in the sum of Rs. 5,00,000/ drawn on Punjab and Sind Bank, Roshanara Road, Delhi the same is Ex. CW1/A and Cheque No. 189824 dated 13.07.2007 in the sum of Rs. 1,00,000/ drawn on Indian Overseas Bank, Daryaganj, New Delhi the same is Ex. CW1/B to the complainant on 04.11.2006 but on presentation the said cheques were returned back dishonored with the remarks "INSUFFICIENT FUND" and "PAYMENT STOPPED BY DRAWER" vide dishonour memos dated 30.06.2007 and 13.07.2007 respectively. Thereafter a legal notice was sent to the accused persons on 31.07.2007 by way [PRECEDENT] page no. 3 of Pages 23 of regd AD and [ACT]. It is further alleged that despite service of legal notice accused persons have not paid the cheques amount to the complainant till the filling of the case.
3. After the complaint was filed, the complainant led the pre summoning evidence by way of an affidavit and after hearing the counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused persons vide order dated 28.09.2007 for the offence U/[SECTION] [ACT]. On appearance of the accused person notice U/[SECTION] [ACT] dated 05.02.2010 was framed upon them to which they pleaded not guilty and claimed trial.
4. In order to prove the case, the complainant examined himself as CW1 and reiterated the contents of the complaint on oath before this court and filed an affidavit in evidence. He also exhibited original cheques bearing No. 592751 & 189824 as Ex. CW1/A & Ex. CW1/B, the cheque presenting slips are Ex. CW1/C & Ex. CW1/D, the cheque returning memos are Ex. CW1/E & Ex. CW1/F, the cheque debit memos are Ex. CW1/G Ex. CW1/H the legal notice of demand dated 31.07.2007 is exhibited as Ex. CW1/I, The original receipts of [ACT] are Ex. CW1/J, postal receipt are Ex. CW1/K, legal notices received back with the remark refused are Ex. CW1/M & Ex. CW1/N, AD card is Ex. CW1/L. Complainant examined clerk from Indian Overseas Bank, Daryaganj as CW2 who brought the letter sent by the accused company to stop payment of the cheque in question bearing No. 189824 as CW2/A and also exhibited stop payment statement as CW2/B. Complainant also examined clerk from PNB, Roshan Aara Road as CW3 who brought the cheque returning register exhibited as CW3/A and also exhibited account statement as CW3/B. One more witness CW4 computer operator from Bank of India Parliament street was also examined by the complainant who [PRECEDENT] page no. 4 of Pages 23 exhibited authority letter from his manager as CW4/A, extract of inward cheque returning book as CW4/B, statement of account of the complainant as CW4/C. Thereafter, the complainant evidence was closed at request.
5. Thereafter the statement of accused persons were recorded U/[SECTION] [ACT] in which all the incriminating evidence along with exhibited documents were put to the accused persons. In his statement accused [ENTITY] denied the case of the complainant and stated that earlier he gave a cheque of Rs 5,00,000/ bearing no. 592751 as security to the complainant and towards the outstanding for which the said cheque was given he gave three cheques to the complainant two of Rs. 2,00,000/ each and third one for Rs.100,000/. The two cheques of Rs.2,00,000/ each were encashed by the complainant, However the third cheque of Rs. 1,00,000/ bearing no. 189824 was given as security only. In her statement accused [ENTITY] mittal denied the case of the complainant and stated that she was in no manner responsible and incharge of day to day affairs of the accused no.3 company from whose account the cheques in question were issued. Thereafter the case was fixed for defence evidence and Mr. [ENTITY] executive officer of accused no.3 was examined as defence witness, who exhibited the form 32 of the accused company as ex. DW1/DX1 to DW1/DX18 (OSR) and Mark 'A' & 'B'. Attendance register maintained at the office of the accused company is exhibited as Ex. DW1/DX19(OSR), he also exhibited a letter received by the accused company from reliance general insurance as ex. DW1/DX1(OSR). Further document exhibited as DW1/X1 and DW1/DX21 were put to him in his cross examination.
6. I have heard Ld. counsels and perused the entire record of the case file and the evidence on record. Both the counsel have referred to a number of cases, I have discussed them at the relevant place.
7. Before proceeding further let us go through the relevant [PRECEDENT] page no. 5 of Pages 23 provisions of law. The main ingredient of [SECTION] of the [ACT] are as follows:
(a) The accused issued a cheque on an account maintained by him with a bank.
(b) The said cheque has been issued in discharge of any legal debt or other liability.
(c) The cheque has been presented to the bank within the period of six months from the date of the cheque or within the period of its validity.
(d) When the aforesaid cheque was presented for encashment, the same was returned unpaid/ dishonoured.
(e) The Payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the Bank regarding the return of the cheque.
(f) The Drawer of the cheque failed to make the payment within 15 days of the receipt of the aforesaid legal notice of demand.
If the aforesaid ingredients are satisfied then the drawer of the cheque shall be deemed to have committed an offence punishable u/[SECTION] [ACT].
8. Now let us deal with the each ingredient of the [SECTION] of [ACT] to see whether the case against the accused persons has been proved or not.
9. WHETHER THE CHEQUES WERE ISSUED OR NOT:
CW1 has stated in his examine in chief that cheques in question were issued by the accused no.1 [ENTITY] as authorised signatory and Managing Director of accused no.3. Accused no.1 also accepted the fact of issuance of the cheques to the complainant however he submitted that the same were issued as security purpose only. Nevertheless this fact stand proved that the cheques in question were issued by the accused no. 1 as authorised signatory and Managing Director of accused no.3.
[PRECEDENT] page no. 6 of Pages 23
10. WHETHER THE CHEQUES IN QUESTION HAVE BEEN ISSUED IN DISCHARGE OF ANY LEGAL DEBT OR OTHER LIABILITY:
It is submitted by the CW1 that he gave a personal loan of Rs.6,00,000/ to the accused persons on their demand. It is also submitted in the complaint that after advancing the amount complainant on a number of occasions accepted the request of the accused persons not to present their cheques for encashment as accused were into financial losses and on that accused persons also used to issue fresh cheques after taking old cheques back. Finally on 03.11.2006, a meeting was arranged at B253, Vivek Vihar, Delhi in the presence of accused persons, their manager, complainant, complainant's brother Sh. [ENTITY] and his wife and on that meeting accused persons were agreed to finally settle their liability, In pursuant to the said settlement manager of the accused persons handed over two post dated cheques no. 592751 dated 01.01.2007 in the sum of Rs. 5,00,000/ drawn on Punjab and Sind Bank, Roshanara Road, Delhi the same is Ex. CW1/A and Cheque No. 189824 dated 13.07.2007 in the sum of Rs. 1,00,000/ drawn on Indian Overseas Bank, Daryaganj, New Delhi the same is Ex. CW1/B to the complainant on 04.11.2006.
At this stage let us go through the relevant provisions of law. There is a presumption in favour of the complainant u/[SECTION] [ACT] that until the contrary is proved, it will be presumed that every negotiable instrument was drawn for consideration and every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration.
Further [SECTION] of the [ACT] provides that it shall be presumed until the contrary is proved that the holder of the cheque received the cheque of [PRECEDENT] page no. 7 of Pages 23 the nature referred in the [SECTION] for the discharge in whole or in part of his debt or liability.
Now it will have to be examined whether the accused has rebutted the presumption as contemplated by [SECTION] and [SECTION] of [ACT].
It has been observed by the Hon'ble High Court of Delhi in [PRECEDENT] that the offence u/[SECTION] [ACT] is a technical offence and the complainant is only supposed to prove that the cheques issued by the respondent were dishonored, his statement that cheques were issued against liability or debt is sufficient proof of the debt or liability and the onus shifts to the respondent / accused to show the circumstances under which the cheques came to be issued and this could be proved by the respondent only by way of evidence and not by leading no evidence. It was further observed that in order to rebut the presumption u/[SECTION] of the [ACT], the accused, by cogent evidence, has to prove the circumstance under which the cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheques. Unless the accused had proved that he acted like a normal businessman / prudent person entering into a contract he could not have rebutted the presumption u/[SECTION] [ACT]. If no loan was given but cheques were retained he immediately would have protested and asked the cheques to be return and still cheques were not returned he would have served a notice as complainant.
Therefore after the establishment of the fact that the cheques were issued by the accused and specific statement of the complainant as stated above regarding liability of the accused the burden to rebut the presumption shifted to the accused. It is established principle of law that presumption of law as raised Under [SECTION] & [SECTION] of the [ACT] can be rebutted only by [PRECEDENT] page no. 8 of Pages 23 cogent evidence and not by mere plea taken in the statement of the accused recorded under [SECTION] of [ACT] Further such cogent evidence can be the cross examination of the complainant or his witnesses (as held in [PRECEDENT].
In the present case the defence of the accused persons with respect to the liability with regard to the cheques in question is two fold. First that both the cheque in question were given only as security and were not towards payment of any liability and secondly the cheques were claimed to be issued with respect to only a time bared liability thus it can not be said that the same were issued towards discharge of any legally enforceable debt or liability. This court would discuss these two grounds separately : First we taken up the issue whether the cheques were issued towards any legally enforceable debt or liability or not as it is alleged by the accused persons that the debt in respect of which the cheques have been alleged to be issued was time bared.
In his examination in chief the complainant had not mentioned the date of giving the personal loan to the accused persons however he submits that a settlement had arrived between complainant and accused persons on 03.11.2006 and consequent to that on 04.11.2006 itself two post dated cheques i.e. the cheques in question were handed over to him by the Manager of the accused persons and the cheques were dated 01.01.2007 and 13.01.2007. During the cross examination it was submitted by the complainant that loan was extended by him in the year 2002. It is contended by the defence counsel that even if we assume that any loan was extended in the year 2002 then as per the [ACT] the limitation period for its repayment would have been till 2005 only. While admittedly the cheques are of the year 2007 and any alleged meeting was dated 03.11.2006 thus the alleged loan had became time bared and not remain legally enforceable by that time.
[PRECEDENT] page no. 9 of Pages 23 Defence Counsel has also filed a case decided by Hon'ble [PRECEDENT] on this aspect, which says that cheque issued in respect of a time bared debt can not be considered to be issued towards a legally enforceable debt which is the essential condition to be full filed for holding a person liable U/[SECTION] [ACT]. On the other hand Ld. Counsel for the complainant had submitted that a cheque duly written, drawn and handed over in respect of time bared debt raised a separate contract as per [SECTION] of the [ACT]. The Ld. Counsel for the complainant had filed a case decided by the Hon'ble High Court of Kerala cited as [PRECEDENT] wherein it was held that:
[SECTION] provides for a penalty in a case where a cheque is dishonoured on account of insufficiency of funds. The cheque has to be by way of payment of a 'legally enforceable debt or a liability' The liability may arise out of a contract of otherwise. Thus, to determine as to whether or not a liability is legally enforceable, the provisions of the [ACT] cannot be said to be irrelevant. These can provide a cause for a legal liability.
Resultantly, when a person writes a cheque and delivers it to a person, the drawee not only gets the civil right to present the cheque and recover the amount, but in the event of the cheque being dishonored the person who has issued the cheque becomes liable for prosecution under [SECTION]. In other words, the issuance of a cheque becomes [PRECEDENT] page no. 10 of Pages 23 a promise to pay under [SECTION] of the [ACT]. The delivery of the cheque to the drawee creates a right to recover the money. On the cheque being dishonored the person concerned becomes liable for prosecution. The execution of the cheque is an acknowledgment of a legally enforceable liability and when it is dishonored the consequences of prosecution and punishment follow.
It is, undoubtedly, true that "to draw" means to write and sign.
However, even if the claim is barred by limitation on delivery to the other person, it becomes a valid consideration for another agreement. The drawal of the cheque evidences such an agreement.
This acknowledgment is enforceable. The drawing and delivery of a cheque create a legally enforceable liability. Thus, we are of the opinion that when a person writes, signs and delivers a cheque to another it is an acknowledgment of a legally enforceable liability.
[SECTION] of the [ACT] read as under:
1 XXXX 2 XXXX 3 or is a promise to pay a debt barred by limitation law It is a promise, made in writing and signed by [PRECEDENT] page no. 11 of Pages 23 the person to be charged there with, or by his agent generally or specially authorised in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these cases, such as agreement is a contract.
Thus it is clear from [SECTION] of [ACT] that if a person made a promise in writing and sign the same to pay a time bared debt such a agreement is a valid contract. In the case in hand it was accepted by the accused no. 1 that the cheques in question were given by him to the complainant though he submitted that the same were given only for the purposes of the security. Nonetheless the fact remains that the accused persons extended a promise in writing and signed that is by way of written signed cheque to the complainant to repay a time bared debt thus the same squarely false under the ambit of [SECTION] of the [ACT]. This was also observed by the Hon'ble Supreme Court of India in [PRECEDENT].
It is contended by the Ld. Counsel for the accused persons that this fact of creation of a new promise created by the [SECTION] of the [ACT] was not put to the accused persons in their statement U/[SECTION] [ACT] thus can not be relied upon the court to decide the present matter. It is to be made clear that the plea of a new contract as created by [SECTION] of [ACT] is a law point and was not required to be put to the accused persons in their statement U/[SECTION] [ACT]. Further the fact that the cheques were issued towards legally enforceable debt was put to the accused persons in their statement U/[SECTION] [ACT] thus this plea is not maintainable. Thus it can be concluded that [PRECEDENT] page no. 12 of Pages 23 the chques written and signed that is duly drawn even in respect of time bared legally enforceable debt creates a new contract which give rise to a legaly enforceable liability.
Coming to the second defence of the accused persons that the cheques in question were issued only as security and not towards payment of any legally enforceable debt or liability. On the other hand it is submitted by the Ld. Counsel for the complainant that the cheques in question were given towards legally enforceable debt and liability. However in the statement of the accused [ENTITY] recorded U/[SECTION] [ACT] it has been submitted by him that the cheque of Rs.5,00,000/ was given as security by him to the complainant and later on he made a payment of Rs.4,00,000/ by way of two different cheques to the complainant and also issued the other cheque in question of Rs. 1,00,000/ to the complainant towards payment of liability in respect of which said security cheque of Rs.5,00,000/ was issued. From the fact of payment of Rs.4,00,000/ as himself admitted by the accused towards cheque of Rs.5,00,000/. It is very much clear that accused is liable to pay Rs.5,00,000/ in respect of the cheque of Rs.5,00,000/ thus this cheque cannot be considered merely a security cheque as the cheque was the post dated cheque in respect of a legally enforceable debt or liability. Which can only be given to be encashed on the date mentioned on it, in case the debtor fails to pay the debt amount before the date mentioned on the cheque. Further the cheque of Rs.1,00,000/ have also been stated by the accused to be issued as security but he has not explained for security of what this cheque was issued thus this bald plea of the accused cannot be accepted.
Now we have to determine as to what was the loan amount legally recoverable by the complainant from the accused persons as on the date of dishonor of the cheques in question. In the legal notice, complaint and evidence on affidavit of the [PRECEDENT] page no. 13 of Pages 23 complainant it is stated by him that he extended a loan of Rs. 6,00,000/ to the accused persons and towards repayment of same the cheques of Rs.5,00,000/ and Rs.1,00,000/ respectively were issued. However at the third date of the cross examination of the complainant he accepted that in the year 2006 he received a sum of Rs.4,00,000/ from the accused persons by way of two cheques. At this moment it was for first time reveled by the complainant that infact he gave a total loan of Rs.10,00,000/ to the accused persons and they had repaid an amount of Rs.4,00,000/ to him and even after that payment an amount of Rs.6,00,000/ was outstanding on them. The explanation given by him for not disclosing this fact earlier is that since the loan amount of Rs.4,00,000/ was settled thus there was no need to mention that in the present case. Further on the next date of hearing the complainant brought his Passbook and exhibited the same as Ex. CW1/DX. As per which a total of Rs.5,00,000/, Rs. 2,00,000/ by way of cheque bearing no. 738918 and Rs.3,00,000/ vide cheque no.738919 both are dated 30.12.2002 were given by him to a company / firm Dooars which is also the name of the accused no.3. Though it is suggested on behalf of the accused persons that this payment was not made to the accused persons but they have not brought any evidence on record to prove that the said payment was not received by them in their account which could be easily done by them by bringing the statement of account of all the bank accounts of accused no.3, thus this fact is proved that complainant had extended a loan of Rs.
5,00,000/ to the accused persons though the complainant claims that he extended a sum of Rs.6,00,000/ or Rs.10,00,000/ to the accused persons. However it is clear that the complainant gave an advance of Rs.500,000/, by way of cheques and could proved that, hence it is very unlikely that the remaining amount would have been extended by him in cash without taking any written receipt further the complainant has been unable to prove if he had [PRECEDENT] page no. 14 of Pages 23 withdrawn any such amount from his account thus the presumption of law that the cheques in question for a sum of Rs. 6,00,000/ were issued towards legally enforceable debt stood rebutted with the fact of proving the repayment of Rs.4,00,000/ by the accused and now it was for the complainant to prove that these cheques were in respect of some other liability. However the complainant has failed to prove the same infact he could only prove that he had extended a loan of Rs.5,00,000/ to the accused persons in the year 2002. Further it is very well proved that in the year 2006 a sum of Rs.4,00,000/ was received by the complainant from the accused persons thus after that payment only a sum of Rs.1,00,000/ remain to be recoverable by the complainant from the accused persons. The same is the situation as admitted by the accused persons in the written statement filed by them in a civil suit between the parties. Certified copy of the same is Ex. DW1/X1, which is admissible in evidence as an admission made in a previous proceedings between the parties. Thus after making the payment of Rs.4,00,000/ and handing over the cheque of Rs. 1,00,000/ to the complainant the accused persons were not liable to make payment with respect to the cheque of Rs.5,00,000/. However they can not save themselves from their liability in respect of the cheque of Rs.1,00,000/ which is Ex. CW1/B in the present case.
The counsel for the accused cited the decision of the Supreme court in his favour titled as [ENTITY] v. Dattataraya G. Hegde (2008) 4 SCC 54, however the ratio of this case that existence of legally recoverable debt is not a matter of presumption under [SECTION] of the [ACT], has been overruled by the Hon'ble Supreme Court itself in [PRECEDENT] where in it was held:
We are in agreement with the respondentclaimant [PRECEDENT] page no. 15 of Pages 23 that the presumption mandated by [SECTION] of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in [ENTITY] (supra) may not be correct.
Considering the entire evidence on record, it stands duly proved that the cheques were issued towards liability, however in respect of liability towards cheque of Rs.5,00,000/ the accused persons paid an amount of Rs.4,00,000/ to the complainant and also handed over a cheque of Rs.1,00,000/ to him which is also a cheque in question thus at the time of presentation of the cheques for encashment accused persons were not liable to make payment in respect of cheque bearing no. 592751 for an amount of Rs. 5,00,000/ which is Ex. CW1/A but they were liable for payment in respect of cheque bearing no. 189824 for a sum of Rs.1,00,000/ which is CW1/B.
11. WHETHER THE CHEQUES WERE PRESENTED WITHIN THE PERIOD OF VALIDITY:
Perusal of the record reveals that the cheques in question which are Ex. CW1/A & Ex. CW1/ B are dated 01.01.2007 & 13.04.2010 respectively, were got dishonoured vide cheques returning memo which are Ex. CW1/E dated 30.06.2007 & cheque returning memo Ex. CW1/F dated 13.07.2007 respectively which clearly shows that the cheques were presented within period of their validity i.e. within six months from the date of the cheques.
CW4 the officials from the bank of the complainant filed on record Ex. CW4/C which shows that the cheque bearing no. 592751 Ex. CW1/A was credited in the account of the complainant on 30.06.2007 and received back dishonored on 02.07.2007 and cheque bearing no. 189824 was credited in the account of the complainant on 13.07.2007 and received back dishonored on [PRECEDENT] page no. 16 of Pages 23 14.07.2007. The accused has not proved otherwise. Thus this fact stand proved beyond doubt that cheques were presented for encashment within time.
12. DISHONOUR OF CHEQUES IN QUESTION:
In this case CW1 has got exhibited the cheques returning memo as per [SECTION] of [ACT] as Ex. CW1/E & Ex. CW1/F and informations memo are Ex. CW1/G & Ex. CW1/H. As per which the cheque returning memos the cheque bearing no. 592751 was returned back dishonored with the remark "FUNDS INSUFFICIENT" and the cheque bearing no. 189824 was returned back dishonoured with the remark "PAYMENT STOPPED BY DRAWER". The accused persons could not have proved otherwise Thus this fact stand proved beyond doubt that cheques were dishonoured on the ground of "Insufficient Funds" & "Payment Stopped by drawer" respectively.
13. SERVICE OF LEGAL NOTICE OF DEMAND UPON THE ACCUSED:
CW1 has specifically stated in his examination in chief that the complainant got issued the legal notice of demand dated 31.07.2007 which is Ex. CW1/I and it was sent to the accused on the same day (within 30 days of knowledge of dishonour of cheque) vide [ACT] and registered post, slips of the same are Ex. CW1/J (colly) & Ex. CW1/K(colly) respectively. The legal notice was received back delivered (vide AD card Ex. CW1/L) at the address of the company which was mentioned by the complainant as W76D, Sainik Farm, Anupam Garden, Delhi and the legal notice is sent at the residential address of the accused no. 1 & 2 were received back with the remark refused (vide returned letter which are Ex. CW1/M & Ex. CW1/L). The address on the same is mentioned as H.No. 8, Lane W13, Western Avenue Farm, South Delhi. Returned AD card is exhibited as Ex. CW1/F. [PRECEDENT] page no. 17 of Pages 23 The accused persons had denied the service of the legal notices. It is submitted on behalf of the accused that the correct address of their firm is W76D, Anupam Gardens, Sainik Farms, New Delhi110030, while the legal notice bears the address as W76D, Sainik Farm, Anupam Garden. Further it is also submitted that even the residential address of the accused no. 1 & 2 is not correct on the legal notice as their exact address is H.No. 8, Lane W13, Western Avenue, Sainik Farms, New Delhi62, while the legal notice contains the address H.No. 8, Lane W13, Westerns Avenue Farms, Delhi62. The defence counsel had put a Map taken from the Internet before the complainant witness which is Mark X to suggest that the place Anupam garden and Sainik Farm which are at point A & B on the map are very distant places. This map is not as per scale but this map shows that the point where the word Sainik farm has been written the words central avenue were also written with the words sainik farm and towards the upside of the paper words country club sainik farm is written and above that words Anupam gardens is written. Thus it is very much clear that Anupam Gardens and Sainik Farms are nearby areas as no other colony is mentioned between the two on this map. Further towards left side of the point B where the words Sainik farm and central avenue is written a colony Neb sarai is mentioned thereafter a colony Bees sutri harijan basti is written and thereafter again the word sainik farm is written. Further even towards downside of the paper from point B the word south sainik farm is written which is at equal distant as between point A and B. The study of this map itself shows that the Sainik farm is a very large area and is nearby Anupam garden.
In the present case the summons were issued against the accused persons vide order dated 28.09.2007 for appearance before the court on 09.01.2008. These summons were sent at H.No. 8, Lane W13, Western Avenue Farm, South Delhi62 and [PRECEDENT] page no. 18 of Pages 23 also at W76D, Sainik Farms, Anupam Gardens,New Delhi110030. These are the addresses which were mentioned by the complainant on legal notice as well. These summons were received back with the report that at one address the office was found closed and at the second address it was submitted by the servant present there Sir and [ENTITY] have gone to Banglore. After perusal of this report summons were again issued to the accused persons at the very same addresses and on the next date of hearing a Counsel marked his appearance on behalf of the accused persons before the court. There was no application moved by the complainant for changing the address of the accused persons. From this fact it became clear that even if the addresses mentioned on the legal notices and summons are not accurate but the summons were reached correctly at the place of the accused persons. This is a general trend that some time people write slightly wrong address but the postman or the process servers who are well aware about that area could reach the exact address. From the above discussion it is very much clear that notices were sent to the addresses on which summons were reached and consequent to that the accused persons marked their appearance before the court, thus it can be safely deemed that the legal notice were also reached at the correct addresses of the accused persons.
In [PRECEDENT], it was held by the Apex court that:
"No doubt [SECTION] of the Act require that the notice should be given only by "post". Nonetheless the principle incorporated in [SECTION] (quoted above) can be profitably be imported in a case whee the sender has dispatched the notice by post with the correct address written on it then can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such non service. Any other interpretation can lead to a very tenuous position, as the [PRECEDENT] page no. 19 of Pages 23 drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice".
The above stated position was again reiterated by the Apex court in [PRECEDENT]'s case where apex court further held:
It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under [SECTION] of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under [SECTION] of the Act, cannot obviously contend that there was no proper service of notice as required under [SECTION], by ignoring statutory presumption to the contrary under [SECTION] of the [ACT] and [SECTION] of the [ACT].
In view of the above discussion it can be safely concluded that the defence of non service of legal notices is not available to the accused persons and the legal notices are deemed to be served upon the accused persons.
14. THE DRAWER OF THE CHEQUE HAS FAILED TO MAKE THE PAYMENT WITHIN 15 DAYS OF THE RECEIPT OF SAID NOTICE:
CW1 has deposed in his examination in chief that despite service of legal notice of demand accused persons have failed to pay the cheques amount to the complainant. The accused persons themselves have submitted in their statement under [PRECEDENT] page no. 20 of Pages 23 [SECTION] [ACT] that there was no question of making any payment to the complainant in respect of the cheques in question as the accused persons were not legally liable to pay in respect of the cheques in question. Therefore this fact also stands proved.
The present case has been filed U/[SECTION] [ACT] read with [SECTION] of the [ACT]. [SECTION] is invoked when a offence is committed by a company. Three categories of a person can be discerned from the said provision who were brought within the preview of the penal liability through the legal fiction envisaged in the section. They are (1) the company the principal offender, which committed the offence, (2) every one who was in charge of and was responsible for the business of the company, (3) any other person who is a director or a manager or a secretary or officer of the company, with whose connivance and due to whose neglect the company has committed the offence.
In the present case the company doors Ltd on whose behalf the cheques were issued is accused no.3 and its managing director who had signed the cheques in question is accused no.1 and there is no dispute with respect to this accused as he is the Managing director and signatory of the cheques. However the accused no. 2 [ENTITY] has been stated by the complainant to be a director of the company and also responsible for the offence U/[SECTION] [ACT]. The defence counsel had vehemently argued that accused [ENTITY] is not a director of the company.
As far as accused [ENTITY] is concerned it is submitted by the complainant in his chief examination that on the demand of accused [ENTITY] and [ENTITY] he gave the personal loan to them, at the alleged meeting held on 03.11.2006 both accused [ENTITY] and [ENTITY] were present. He has also submitted that at the relevant time both the accused were in charge and responsible for running the affairs of the company. It is contended on behalf of the complainant by his counsel that a [PRECEDENT] page no. 21 of Pages 23 quashing petition was filed by the accused [ENTITY] before Hon'ble High Court of Delhi in respect of the present case which was dismissed by the Hon'ble High Court of Delhi vide order dated 21.10.2009 with the observation that from the perusal of the share holding it is clear that 1,90,090 shares were held by the accused [ENTITY] in the accused company and almost similar was the holding of her husband in the said company. The remaining share holders were having only paltry shares in the company thus its clearly makes out a primefacie case that accused [ENTITY] was the director of the company in the question at the relevant point of time when the cheques were purported to had been issued with her knowledge as she was in charge and responsible at the relevant time. However from the perusal of the order it is clear that form 32 of the accused company were not placed before the Hon'ble High Court and the Hon'ble High court had left the question of the factum of her being director of the said company at the relevant point of time was left to be decided on the basis of the evidences adduced during the trial by both the parties.
The complainant has not led any written document in evidence to show that the accused [ENTITY] was the director of the company at the relevant point of time. The complainant had submitted that at the request of accused [ENTITY] and [ENTITY] the personal loan was given by him. It is also submitted by him that a meeting was held between the accused persons and him in the presence of the Manager of the accused persons and the complainant's brother wherein the accused [ENTITY] had also participated, but no documentary evidence been adduced by him to prove the factum of said meeting. On the other hand the defence witness DW1 [ENTITY], executive officer of accused no. 3 have filed on record the form 32 of the company since its corporation in the year 1986 till the year 2005 as Ex. DW1/DX1 to Ex. DW1/DX18(OSR) and also Mark A & B. From the perusal of these [PRECEDENT] page no. 22 of Pages 23 form 32 of Doors Transport Ltd it is very much clear that accused [ENTITY] was not a director of the accused no.3 till 2005. It is submitted by the counsel for the complainant that accused persons have not shown the form 32 for the period after 2005 and the transaction in question was occurred only after 2005. On the other hand it is contended by the defence counsel that a form 32 is issued only at the time when a change occurred in the composition of the directors of a company and since after year 2005 no change was occurred in the board of directors of the accused company thus no form 32 was issued after year 2005. However the defence witness who was the executive officer of the accused company had not submitted before the court that no change was occurred in the composition of the directors after 2005 thus the fact that there was no change in the composition of the directors of the accused company after 2005 have not came before the court by way of evidence. Further the defence counsel at the time of final arguments has also brought before the court a computer generated paper allegedly taken from the site of Ministry of Corporate Affairs as per this paper the DIN number of accused [ENTITY] is 02449400 and as per this the accused [ENTITY] is / was director in three different companies but not in the accused company, but again this document has not been came before the court as evidence.
Considering the above stated discussion and the admitted stand of the accused [ENTITY] before the Hon'ble High court of Delhi that she holds substantial number of shares in the accused company and the observation of the Ho'ble High Court that prime facie she appears to be director of the company. It is the basic principle of evidence act a person who alleged a fact is the one responsible for proving the same. In the present case the complainant has shown accused [ENTITY] as director of Doors Transport Ltd and the only reason for alleging her to be a director [PRECEDENT] page no. 23 of Pages 23 was given by the complainant as "[ENTITY] had told him that accused [ENTITY] was also a director in the company". Apart from this one line nothing else has been stated or proved by the complainant to show that accused [ENTITY] was a director in the company at the relevant point of time. Neither any evidence has been proved to the fact that she was Incharge and responsible for the accused company except the fact that she had substantial share holding in the company. Thus the complainant failed to prove the fact that she is a director in Doors Transport Ltd. Had the complainant shown that accused [ENTITY] was a director of the company at any point of time then the burden of proving the fact that she was not responsible or Incharge for the day to day affairs of the company or she was not a director at the relevant point of time, would have been upon accused [ENTITY] but in the present case that situation did not arise. Thus the fact that she was a director of the accused company and responsible for its day to day affairs remained not proved, hence accused [ENTITY] is acquitted.
15. In view of the aforesaid discussion, I am of the considered opinion that the complainant has proved his case in respect of cheque bearing no. 189824 against the accused company and accused no. 1 [ENTITY] beyond shadow of reasonable doubts. All the ingredients of [SECTION] of [ACT] have been duly proved on record. Accordingly, accused [ENTITY] S/o Late Sh. Moaji Ram Mittal & Doors Transport Ltd stands convicted for the offence U/[SECTION] of [ACT]. Let the copy of this judgment be supplied to the accused [ENTITY] free of cost.
Announced in the open court today i.e. 22.12.2011 ([ENTITY]) MM: KKD: DELHI: 22.12.2011