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TMI Blog2023 (10) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. & Ors.' pending before learned Metropolitan Magistrate (NI Act), North West, Rohini Courts, Delhi, and setting aside of order dated 25.08.2022 vide which notice was framed under Section 251 of Cr.P.C. against the petitioners in the said case; 2. In both these petitions, the petitioner no. 1 i.e. Rajendra Prasad Mittal (accused no. 2 in complaint cases) and petitioner no. 2 i.e. Arun Mittal (accused no. 3 in complaint cases) are the erstwhile Directors of respondent no. 2 i.e. Aarcity Infrastructure Pvt. Ltd. (accused no. 1 in complaint cases). In Crl. M.C. 5315/2023, the respondent no. 1 i.e. Manish Garg is the Director of 'Parker Builders Pvt. Ltd.' which is respondent no. 1 in Crl. M.C. 5316/2023. 3. Brief facts of the case, as per the complaints filed under Section 138/141/142/143A of the Negotiable Instruments Act, 1881 ('NI Act') are that petitioners alongwith Smt. Saroj Mittal, Smt. Akanksha Mittal and R.P. Mittal HUF, who were the owners of units nos. 301-305, Krishna Apra Business Square, Plot No. 4, 5 & 6, Wazirpur District Centre, Netaji Subhash Place, Pitampura, Delhi, had come in contact with the complainant Manish Garg and had communicated their desire to sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation that they had transferred their funds in the said company which was a family owned and family run company. Further, the petitioners had also issued a cheque bearing no. 944329, dated 31.03.2020, drawn on Indian Bank, Pitampura, Delhi, in favour of complainant Manish Garg for a sum of Rs. 40,00,000/-from the account of respondent no. 2/accused no. 1 company i.e. Aarcity Infrastructure Pvt. Ltd. However, upon presentation, both these cheques had got dishonored for the reasons 'Funds Insufficient' vide return memo(s) dated 06.06.2020. Thereafter, the complainants had issued statutory legal notices dated 25.06.2020 to the petitioners and accused company Aarcity Infrastructure Pvt. Ltd. calling upon them to make payment of the aforesaid amounts. Upon failure on part of accused persons to make payment, the Complaint Case No. 5892/2020 was filed by the complainant Manish Garg for dishonor of cheque of Rs. 40,00,000/-, and the Complaint Case No. 5888/2020 was filed by the complainant company Parker Builders Pvt. Ltd. for dishonor of cheque of Rs. 58,50,000/-. Thereafter, the learned Trial Court had issued summons against the accused, and notice under Section 251 of Cr.P.C. was framed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruary-March, 2020 from the third party in whose favour the sale deed had been executed. 5. Learned counsel for the petitioners argues that the allegations in the complaints, even if taken at their face value and presumed to be correct, do not disclose commission of any offence under the provisions of the NI Act. It is stated that the learned Trial Court failed to appreciate that on the date of issuance of cheque i.e. in June, 2019 and even on the date of deposit of cheque or its dishonor, there existed no legal debt or liability. It is stated that repayment obligation by the accused company towards the complainant company never arose as there was no receipt of any amount by the accused company from the complainant company. It is further submitted that the cheque issued by the accused company in favour of the complainants were without any consideration as the accused company and the petitioners as directors of the accused company were not party to the Agreement to Sell, from which the instant dispute arises. It is submitted that the cheque was issued on the bald assurance of complainant Manish Garg whereby it was assured to the petitioners that third party shall reimburse some amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of a cheque is deemed to have committed the offence if the following ingredients are fulfilled: (i) A cheque drawn for the payment of any amount of money to another person; (ii) The cheque is drawn for the discharge of the 'whole or part' of any debt or other liability. 'Debt or other liability' means legally enforceable debt or other liability; and (iii) The cheque is returned by the bank unpaid because of insufficient funds. However, unless the stipulations in the proviso are fulfilled the offence is not deemed to be committed. The conditions in the proviso are as follows: (i) The cheque must be presented in the bank within six months from the date on which it was drawn or within the period of its validity; (ii) The holder of the cheque must make 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 from the receipt of the notice from the bank that the cheque was returned dishonoured; and (iii) The holder of the cheque fails to make the payment of the 'said amount of money' within fifteen days from the receipt of the notice..." (emphasis supplied) 10. Thus, there is no dispute reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what should be the responsibility of the quashing Court and whether it must weigh the evidence presented by the parties, at a pre-trial stage. *** 10. It is also relevant to bear in mind that the burden of proving that there is no existing debt or liability, is to be discharged in the trial. For a two judges Bench in M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd.3, Justice S.N. Variava made the following pertinent observation on this aspect:- "17. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability." 11. The legal presumption of the cheque having been issued in the discharge of liability must also receive due weightage. In a situation where the accused moves Court for quashing even before trial has commenced, the Court's approach should be careful enough to not to prematurely extinguish t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the criminal process at a pre-trial stage can be grave and irreparable. Quashing proceedings at preliminary stages will result in finality without the parties having had an opportunity to adduce evidence and the consequence then is that the proper forum i.e., the trial Court is ousted from weighing the material evidence. If this is allowed, the accused may be given an un-merited advantage in the criminal process. Also because of the legal presumption, when the cheque and the signature are not disputed by the appellant, the balance of convenience at this stage is in favour of the complainant/prosecution, as the accused will have due opportunity to adduce defence evidence during the trial, to rebut the presumption. 18. Situated thus, to non-suit the complainant, at the stage of the summoning order, when the factual controversy is yet to be canvassed and considered by the trial court will not in our opinion be judicious. Based upon a prima facie impression, an element of criminality cannot entirely be ruled out here subject to the determination by the trial Court. Therefore, when the proceedings are at a nascent stage, scuttling of the criminal process is not merited..." (empha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermore, in the complaints which have been sought to be quashed by the petitioners herein, there are specific averments to the affect that the entire set of transactions and agreements had taken place between the complainant Manish Garg and petitioners herein, and Manish Garg had paid an amount of Rs. 96,83,738/- to DHFL from his company's account, and Rs. 40,00,000/- himself to the petitioners, and at a later stage, to return the said amount alongwith interest, the petitioners had issued cheques, in favour of complainants, drawn on the bank account of their company (accused company) on the pretext that the same was a family owned company and they had transferred all their funds into the bank account of company. It is also not the case of petitioners that they were not incharge of not responsible for the day-to-day affairs of the accused company. 14. As regards the amount of debt/liability, the complainants have averred in their complaints that the petitioners had assured that they would return the aforesaid amount alongwith interest, and as per complainant, the cheque amount includes the amount of interest alongwith principal amount. The case of petitioners is contrary to the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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