Court No. - 44
Case :- APPLICATION U/S 482 No. - 25446 of 2018 Applicant :- Shri Lakshmi Defence Solutions Ltd. And 3 Ors Opposite Party :- State Of U.P. And Anr Counsel for Applicant :- Manjari Singh,Kunal Ravi Singh Counsel for Opposite Party :- G.A.
Hon'ble Rajeev Misra,J.
Heard Mrs. Manjari Singh, learned counsel for the applicants and the learned A.G.A. for the State.
This application under section 482 Cr. P. C. has been filed challenging the entire proceedings of Complaint Case No. 3821 of 2015 (I.F.C.I. Vs. Shri Lakshmi Defence Solutions Limited and others), under section 138 N.I. Act, pending in the Court of Additional Chief Metropolitan Magistrate, IX, Kanpur Nagar.
From the record, it appears that three post dated cheques drawn on Bank of Baroda, Birhana Road Branch, Kanpur, bearing No. 000132 dated 30.11.2013, No. 000133 dated 30.12.2013 and No. 000134 dated 30.01.2014 each amounting to Rs.1,00,00,000/- (Rupees one crore) were issued by the applicant No. 2 in favour of the complainant/opposite party No. 2 The said cheques were signed by the applicant No. 2. The complainant-opposite party No. 2 presented the aforesaid cheques to its Banker Karur Vyas Bank Limited No. 3, Sant Nagar, East of Kailash, New Delhi on 21.02.2014. The aforesaid cheques were not encashed and accordingly, returned, vide memo of return dated 22.02.2014. The reason assigned for non payment in the memo of return regarding the return of aforesaid cheques was "Exceed Arrangement". Consequently, as per the mandate of section 138 sub clause (b) of the Negotiable Instruments Act, 1881, the complainant-opposite party No. 2 sent a legal notice dated 28.02.2014 to the applicants and others demanding payment of the amount payable under the disputed cheques. As no amount was paid in spite of the aforesaid legal notice dated 28.02.2014, the complainant filed a complaint in terms of 190 Cr. P. C. read with sections 138, 141 and 142 of the N.I. Act on 09.04.2014 in the Court of Metropolitan Magistrate, Saket Courts, New Delhi. The Metropolitan Magistrate, Saket Courts, New Delhi, vide order dated 15.4.2014, took cognizance and accordingly summoned the applicants, vide order dated 15.04.2014. It is pertinent to mention here that the Metropolitan Magistrate, Saket Courts, New Delhi dropped the names of the accused Nos. 4 and 5 arrayed in the complaint, as according to the Metropolitan Magistrate, no case was made out against them. The said order appears to have become final for want of challenge on the part of the complainant opposite party No. 2. While the matter was pending consideration in the Court of Metropolitan Magistrate, Saket Courts, New Delhi, the Apex Court delivered the judgement in the Case of Dashrath Rup Singh Rathod Versus State of Maharashtra and others, reported in (2014) 9 SCC 129, decided on 01.08.2014. Complying with the mandate of the aforesaid judgement of the Apex Court, the Metropolitan Magistrate, (N.I. Act), Saket Courts New Delhi, passed the order dated 18.9.2014, which is on the record at page 91 of the paper book. The said order is reproduced herein below:-
"Present: Non for the complainant Accused absent In the present case, notice has not been framed till date. Therefore, in view of the directions of Hon'ble Supreme Court of India in the case titles a "Dashrath Rup Singh Rathod Versus State of Maharashtra & Anr." in Crl. Appeal No. 2287/09 decided on 01.08.14, this Court has no territorial jurisdiction to try this case. Therefore, the complaint is returned to the complainant to file the same in the court having territorial jurisdiction to try the same within 30 days from today only.
Ahlmad is directed to return the complaint and original documents to the complainant/AR of the complainant or counsel for the complainant after obtaining the certified copies of the same on record.
It is duty of the complainant to pursue the case, but today none has appeared on behalf of the complainant and complainant is directed to comply with this order.
Copy of the order be given Dasti to the complainant.
File be consigned to Record Room."
Pursuant to the aforesaid order, the complainant-opposite party No. 2 filed the complaint in the Court of Additional Chief Metropolitan Magistrate, Court No. 9, Kanpur Nagar on 02.03.2015, which is after almost 5 months from the date of passing of the order dated 02.03.2015. Upon the filing of the said case in the Court of Additional Chief Metropolitan Magistrate, Court No. 9, Kanpur Nagar, steps were taken by the Court to secure the presence of the applicants. A perusal of the order sheet of the aforesaid complaint case, which is on the record at page 93 onwards of the paper book, summons were issued against the applicants, vide order dated 29.7.2016. There is nothing in the typed copy of the order sheet to show the service of summons upon the applicants. Thereafter, the Magistrate, vide order dated 14.6.2017, issued bailable warrants against the applicants and ultimately vide order dated 03.11.2017 issued non-bailable warrants against the applicants. From the typed copy of the order sheet of the complaint case pending before the Court below, it is not clear as to whether the summons were ever served upon the applicants and similarly the bailabale warrants were also ever served upon the applicants. However, thus much clear that the non-bailable warrants were subsequently issued by the Court below against the applicants which have been operating against the applicants since 03.11.2017 i.e. for the last more than 8 months.
It is the case of the applicants neither the summons nor the bailable warrants were served nor any of the applicants was taken in custody pursuant to the non-bailable warrants issued against the applicants on 03.11.2017.
Mrs. Manjari Singh, learned counsel for the applicants in challenge to the entire proceedings of the above mentioned complaint case has made following submissions before the Court.
(a) According to the learned counsel for the applicants, the Metropolitan Magistrate (N.I. Act) Saket Courts, New Delhi, vide order dated 18.9.2014 categorically provided that the complaint is returned to the complainant to file the same in the Court having territorial jurisdiction to try the same within 30 days from today only i.e. 18.09.2014.
(b) It is thus urged that the complainant-opposite party No. 2 was duty bound to file the complaint before the Court below within a period of one month from 18.9.2014, whereas in the present case, the complaint had been filed 02.03.2015, i.e. 5 months beyond the period provided in the order dated 18.9.2014. It is thus urged that the complaint filed by the complainant-opposite party No. 2 before the Court below was barred by limitation and no summons could have been issued against the applicants without condoning the delay.
(c) As a corollary to the second submission, it is next submitted that by now it is well established that a Court cannot proceed against the opposite parties/respondents/defendants without condoning the delay, and any such exercise would prima facie be illegal. In the case in hand, the Court below has proceeded to summon the applicants in ignorance of the order dated 18.9.2014 and that to without condoning the delay in filing the complaint. As such, the summoning of the applicants as well as the consequential proceedings undertaken by the Court below are illegal and without jurisdiction.
(d) On the strength of the aforesaid submission, it is next contended that since the complaint filed by the opposite party No. 2 before the Additional Chief Metropolitan Magistrate, Court No. 9, Kanpur Nagar, was not accompanied with an application under section 5 of the Limitation Act and there was no application before the Court for exercising its jurisdiction under section 142 of the N.I. Act to condone the delay. No delay condonation application can be filed subsequently and therefore proceedings of the above mentioned complaint case are liable to quashed by this Court being barred by limitation.
(e) Referring to the provisions of the Negotiable Instruments (Amendment) Ordinance 2015 (Ordinance No. 6 of 2015), it is submitted that the said ordinance came into force on 15.06.2015. For ready reference, section 142 A, which was inserted in the N.I. Act regarding validation of transfer of pending cases is reproduced herein below:-
"142A. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 or any judgment, decree, order or direction of any court, all cases transferred to the court having jurisdiction under sub- section (2) of section 142, as amended by the Negotiable Instruments (Amendment) Ordinance, 2015, shall be deemed to have been transferred under this Act, as if that sub-section had been in force at all material times.
(2) Notwithstanding anything contained in sub-section (2) of section 142 or sub-section (1), where the payee or the holder in due course, as the case may be, has filed a complaint against the drawer of a cheque in the court having jurisdiction under sub-section (2) of section 142 or the case has been transferred to that court under sub- section (1) and such complaint is pending in that court, all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court irrespective of whether those cheques were delivered for collection or presented for payment within the territorial jurisdiction of that court.
(3) If, on the date of the commencement of the Negotiable Instruments (Amendment) Act, 2015, more than one prosecution filed by the same payee or holder in due course, as the case may be, against the same drawer of cheques is pending before different courts, upon the said fact having been brought to the notice of the court, such court shall transfer the case to the court having jurisdiction under sub-section (2) of section 142, as amended by the Negotiable Instruments (Amendment) Ordinance, 2015, before which the first case was filed and is pending, as if that sub-section had been in force at all material times."
On the strength of the aforesaid provision, it is submitted that the complaint case pending before the Court below ought to have been transferred to the Court of Metropolitan Magistrate (Saket Courts), New Delhi. As such it is urged that the proceedings before the Court below i.e. the Court of Additional Chief Metropolitan Magistrate, Kanpur Nagar are without jurisdiction.
(F) Lastly, it is urged that no liability can be fastened upon the applicants under the disputed cheques, as the same was bona fidely given as security and not in discharge of any liability, which could be recovered as a legally chargeable debt.
On the cumulative strength of the aforesaid submissions, Mrs. Manjari Singh, the learned counsel for the applicants vehemently urged that by no stretch of imagination, the proceedings of the complaint case referred to above can be sustained in law and fact and are, therefore, liable to be quashed by this Court.
The grounds urged by the learned counsel for the applicants in support of the challenge to the proceedings of the complaint case giving rise to the present criminal misc. application are accordingly dealt with.
The last point urged by the learned counsel for the applicants, which is in respect of the liability under the disputed cheques is being taken up first. It is not in dispute that three cheques valued at Rs. 1 crore each dated 30.11.2013, 30.12.2013 and 30.01.2014 were issued by the applicant No. 2 in favour of the complainant opposite party No. 2. Whether the aforesaid cheques were given by the applicant No. 2 in discharge of a legally recoverable debt or not is a question of fact and a disputed defence of the applicants.
This issue has also been set at rest by the Apex Court in the case of Kishan Rao vs. Shankargouda, reported in 2018 AIR SC 3173 also reported in 2018 (8) SCALE, 341. Following has been observed in paragraphs 18, 19, 20, 21 and 22 of the judgement which is quoted herein below:-
"17. Section 139 of he Act, 1881 provides for drawing the presumption in favour of holder. Section 139 is to the following effect:
139. 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.
18. This Court in Kumar Exports vs. Sharma Carpets, 2009 (2) SCC 513, had considered the provisions of Negotiable Instruments Act as well Evidence Act. Referring to Section 139, this Court laid down following in paragraphs 14, 15, 18 and 19:
"14. Section 139 of the Act provides that 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.
15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) "may presume"
(rebuttable), (2) "shall presume" (rebuttable), and (3) "conclusive presumptions" (irrebuttable). The term "presumption" is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the "presumed fact" drawn by a judicial tribunal, by a process of probable 13 reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means "taking as true without examination or proof".
18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.
19. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as pres umed, the purpose of the presumption is over."
19. This Court held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. Following was held in paragraph 20:
"20....The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non- existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant.
To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist..."
20. In the present case, the trial court as well as the Appellate Court having found that cheque contained the signatures of the accused and it was given to the appellant to present in the Bank of the presumption under Section 139 was rightly raised which was not rebutted by the accused. The accused had not led any evidence to rebut the aforesaid presumption. The accused even did not come in the witness box to support his case. In the reply to the notice which was given by the appellant the accused took the defence that the cheque was stolen by the appellant. The said defence was rejected by the trial court after considering the evidence on record with regard to which no contrary view has also been expressed by the High Court.
21. Another judgment which needs to be looked into is Rangappa vs. Sri Mohan, 2010 (11) SCC 441. A three Judge Bench of this Court had occasion to examine the presumption under Section 139 of the Act, 1881. This Court in the aforesaid case has held that in the event 16 the accused is able to raise a probable defence which creates doubt with regard to the existence of a debt or liability, the presumption may fail. Following was laid down in paragraphs 26 and 27:
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat, (2008) 4 SCC 54, may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.
27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant- accused cannot be expected to discharge an unduly high standard or proof."
22. No evidence was led by the accused. The defence taken in the reply to the notice that cheque was stolen having been rejected by the two courts below, we do not see any basis for the High court coming to the conclusion that the accused has been successful in creating doubt in the mind of the Court with regard to the existence of the debt or liability. How the presumption under Section 139 can be rebutted on the evidence of PW.1, himself has not been explained by the High court."
In the light of the observations made by the Apex Court as noted above, there is no room of doubt that this Court in exercise of its jurisdiction under section 482 Cr. P. C. cannot proceed to consider the defence set up by the applicants that the disputed cheques were bona fidely given as security and not in discharge of any legal debt particularly when it is an admitted fact as per the averments made in paragraph No. 4 of the affidavit, which reads as under:-
"That M/s Shri Lakshmi Defence Solutions (applicant no. 1) is a public limited company established in the year 1998 under the Companies Act 1956 primarily dealing in defense equipments. In order to expand its business and fulfil its working capital requirements it availed a loan to the tune of Rs. 12 Crore from the complainant by way of Corporate loan agreement dated 11.04.2013. A copy of the aforesaid Corporate Loan agreement between the parties is being filed herewith as ANNEXURE-2.
This takes me to the effect of the Ordinance of 2015 which admittedly came into force on 15.6.2015 i.e. after the order dated 18.9.2014 was passed by the Metropolitan Magistrate (N.I. Act) Saket Court, New Delhi as well as the date of the filing of the complaint by the opposite party No. 2 in the Court of the on 2.3.2015.
What will be the effect of the directing a case to "shall be deemed to have been transferred" as arbitrary in the last part of section 142 (1) of the N.I. Act.
Order Date :- 30.7.2018 HSM