IN THE COURT OF MS.

TISTA SHAH METROPOLITAN

MAGISTRATE(CENTRAL) NI ACT, CENTRAL DISTT.
THC, DELHI.

CC No. 21/16

M/s Dhanraj Shree Kishan Das

Through its partner
Vipul Goel
6665, Khari Baoli,
Delhi-110006. …... Complainant
Vs.

1. Royal Varsha Industries Pvt. Ltd.

Regd. Office at C014,
Masood Pur Market,
Vasant Kunj, New Delhi-110017

2. Ashutosh Vijay
Director/Authoried Signatory
Royal Varsha Industries Pvt Ltd.
Masood Pur Market,
Vasant Kunj,
New Delhi-110017 …... Accused

Date of Institution : 16.12.2016

Offence complained of : 138 N.I.Act

Date of Judgment : 07.07.2020

Decision : Acquitted

COMPLAINT UNDER SECTION 138 NEGOTIABLE

INSTRUMENTS ACT, 1881.

JUDGMENT

CC No. 21/16 M/s Dhanraj Shree Kishan Das vs. Royal Varsha Industries Pvt. Ltd. Page No. 1 of 22
 1. The present complaint has been filed by the complainant
against the accused under section 138 Negotiable Instruments Act,
1881.

2. The brief facts as alleged by the complainant in the complaint

are that the complainant is a registered partnership firm and Sh. Vipul
Goel is one of the partners of the firm . The complainant is dealing
in the business of dry fruits, spices, crude drugs, natural herbs, rice,
pulses, pooja material and marriage goods in wholesale and retail. It
is further alleged that the accused is also in the field of trading the
spices and the accused had approached the complainant at the office
of the complainant firm and placed an order for supply of various
kinds of spices, such as Biryani Masala and other like masala in the
packaging of 100 gms which was provided by the accused. As per
the instructions, the complainant had supplied the spices/masala to
the accused in the packaging of 100 gms and had raised a bill for a
sum of Rs. 1,97,400/- including the VAT amount of Rs. 9,400/- vide
Bill/Invoice No. 48 dated 06.09.2016. It is further averred that before
dispatching the material, the officials or the representative of the
accused company had visited the premises of the complainant and
made an inspection of the packed goods and at that point of time, a
cheque bearing no. 000054 dated 30.08.2016 for a sum of Rs.
1,88,000/-, drawn on Kotak Mahindra Bank, Vasant Kunj branch,
New Delhi was issued in favour of the complainant firm and it was

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 promised that the balance amount of Rs. 9,400/- towards VAT shall
be paid after the receipt of the goods.

3. When the complainant presented the cheque in question in the

bank in October 2014, the same was returned unpaid by the banker
of the complainant vide cheque returning memo dated 14.10.2016
with the remarks “Payment stopped by drawer”. The complainant
again presented the cheque in the bank on 24.10.2016 and the same
was returned unpaid by the banker to the complainant with the
remarks “funds insufficient”. While the former bank return memo of
14.10.2016 has not been filed the bank return memo pertaining to
24.10.2016 has been filed on record.

4. The complainant thereafter issued a legal demand notice on

02.11.2016 through counsel calling upon the accused to pay the said
cheque amount within a period of 15 days from the date of receipt of
the notice. The said notice was duly served upon the accused but still
the accused failed to pay the aforesaid dishonoured cheque amount.
Hence, the present complaint u/s 138 Negotiable Instrument Act
1881 (hereinafter referred to as NI Act) was filed on 16.12.2016.

5. In order to prove his case, the complainant had examined

himself as CW-1 by way of affidavit CW-1/A and relied upon the
following documents:
(a) Original cheque in question bearing no. 000054 dated
30.08.2016 Ex CW1/1.

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 (b) Original cheque return memo dated 24.10.2016 Ex. CW-
1/2.
(c) Legal demand notice Ex. CW-1/3.

(d) Postal receipt and Courier receipt Ex.CW1/4.

(e) Reply sent by the accused to the legal demand notice

dated Ex.CW1/5.

(f) Photocopy of the Bill/invoice bearing no. 48 dated

06.09.2016 Ex CW1/6.

(g) Photocopy of the Challan issued by the accused Ex

CW1/7

6. On finding of a prima-facie case against the accused, the

accused was summoned on 03.01.2017. Accused no 1 is a company
and accused no 2 has been stated to be the director of the company.
Thereafter, notice u/s 251 Cr.P.C. was framed against both the
accused on 23.11.2017 to which he pleaded not guilty and claimed
trial. The plea of defence of the accused was recorded where the
accused had stated that “I admit my signatures on the cheque in
question. I also admit that I did receive the legal notice. Cheque in
question was given as security for the amount to be given against the
goods to be supplied by the complainant. In case, the amount was not
paid in cash then, the cheque was to be encashed otherwise the
cheque was to be returned. Goods supplied by the complainant was
in poor packaging. We received several complaints regarding the
same after we distributed the goods amongst our distributors. We
immediately returned the entire stock to the complainant. We sent

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 message to the complainant as well as communicated with them
through e-mail regarding the same. We suffered losses due to that
and for that reason, we contacted another manufacturer for our
business. There is no liability of ours towards the complainant herein.
Our cheque has been misused. We had sent messages to the
complainant claiming the tax invoice for the goods supplied by him
but same were not sent. We also stated that we should be given fresh
stock against the losses suffered by us but no reply was received. We
had also replied to the legal notice of the complaint”.

7. After the framing of notice the on behalf of the complainant

firm Mr Vipul Goel examined himself as CW-1. No other witnesses
were examined by the complainant. Thereafter, complainant
evidence was closed and the matter was listed for statement of the
accused u/s 313 Cr.P.C.

8. Statement of the accused was recorded u/s 313 Cr.P.C. r/w

Section 281 Cr.P.C on 18.07.2018 wherein all the incriminating
circumstances appearing in evidence against the accused were put to
him to which the accused stated that “ He had provided the entire
packaging material to the complainant for proper packaging thereof.
When the stock was delivered to them and same was sent to market,
several complaints were received due to poor packing. They
immediately informed the complainant through e-mail and whatsapp
and asked them to rectify the error immediately. They were forced to
recall the entire stock from our distributor. They still paid an amount

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 of Rs. 70,000/- in cash to the complainant. Cheque in question was
given as security. They suffered huge losses due to failure of
complainant to do the assigned job properly. When they claimed that
amount from the complainant, present matter was filed”.

9. Thereafter, the matter was listed for defence evidence. In his

defence, the accused no 2 examined himself as defence witness DW-
1.Thereafter, defence evidence was closed and the matter was fixed
for final arguments.

10. Ld.Counsel for the accused has relied upon the following
judgments as follows:

(a) M/s Alliance Infrastructure Project Pvt. Ltd & Ors vs.
Vinay Mittal, Crl. M.C.No.2224/2009.

11. The submissions made by the Ld. Counsel for the complainant
and the accused have been heard and the record of the case has been
thoroughly perused.

12. Before proceeding to the merits of the case, it is important to

lay down the basic provision of law with respect to section 138 of
the Negotiable Instruments Act, 1881 which is as follows:
Section 138 of Negotiable Instruments Act, 1881 makes
dishonour of cheques an offence. It provides that “where any
cheque drawn by a person on an account maintained by him

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 with a banker for payment of any amount of money to another
person from out of that account for the discharge, in whole or
in part, of any debt or other liability, is returned by the bank
unpaid, either because of the amount of money standing to the
credit of that account is insufficient to honour the cheque or
that it exceeds the amount arranged to be paid from that
account by an agreement made with that bank, such person
shall be deemed to have committed an offence and shall,
without prejudice to any other provisions of this Act, be
punished with imprisonment for a term which may be extended
to two years, or with fine which may extend to twice the
amount of the cheque, or with both”.

13. In order to ascertain whether the accused has committed an

offence u/s 138 NI Act, the following ingredients constituting the
offence have to be proved:
(a) The drawer of the cheque should have issued the
cheque for the discharge, in whole or in part of a
legally enforceable debt or other liability.
(b) The cheque is returned by the bank unpaid, either
because of the amount of money standing to the credit
of that account is insufficient to honour the cheque or
that it exceeds the amount arranged to be paid from that
account by an agreement made with that bank.
(c) The drawer of such cheque fails to make the payment of
the said amount of money within fifteen days of the

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 receipt of the notice from the payee or the holder in due
course demanding the payment of the said amount of
money.

It is only when all the above mentioned ingredients are together

satisfied that the person who has drawn the cheque can be said to
have committed an offence u/s 138 NI Act.

14. As far as the first ingredient constituting the offence is concerned,

it is the contention of the Ld counsel for the complainant that the cheque
in question was issued by the accused for the discharge of a legally
recoverable liability owed to the complainant where the cheque was
issued for the payment of the goods worth Rs 1,88,000/- which had been
supplied to the accused and with respect to the VAT amount of Rs
9,400/-, it was assured that the same shall be paid upon receipt of the
goods. The complainant had supplied the goods in the packaging
provided by the accused and accordingly he had raised a total bill of Rs
1,97,400/- inclusive of the VAT amount which was dated 06/09/2016
and which is present on record as Ex Cw1/6. It is further contended that
since the cheque in question, issuance of which has been admitted by
the accused and which was for the discharge of the legal liability owed
to the complainant, had got dishonored upon presentation, the accused
no 1 company and its director who is accused no 2 are both culpable
under the penal provisions of section 138 of the NI Act.

15. The factual position in the present case is that accused no 1 is a

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 company and accused no 2 is admittedly one of the directors of accused
no 1 company. As per the statement of the accused under section 251
Cr.P.C, the signatures on the cheque in question have been admitted to
be of accused no 2. The factum of the issuance of the cheque in question
in favour of the complainant has also been admitted by the accused.
Further, the cheque in question has been drawn from the account of
accused no 1 company.

16. Considering the above factual position, it is important to

reproduce the legal position as enumerated in Sec.118(a) and Sec.139
of the N.I. Act here.
Section 118(a) of the Act provides that until the contrary is
proved, it shall be presumed that “that every negotiable instrument was
made or drawn for consideration, and that every such instrument, when
it has been accepted, endorsed, negotiated or transferred, was accepted,
endorsed, negotiated or transferred for consideration.”
Further, Section 139 of the Act lays down 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.”

17. In the case of K.N. Beena Vs. Muniyappan AIR 2001 SC 2000,
it was established that “In a complaint u/s 138 the court has to presume
that the cheque had been issued for a debt or liability. This presumption
is rebuttable, however, the burden of proving that the cheque has not
been issued to the complainant by the accused for the discharge of debt

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 or liability, lies on the accused”.

18. Keeping in view the above stated law and in view of the fact that
the cheque in question has been drawn from the account of accused no
1 company which is duly signed by accused no 2, representing accused
no 1 company as the authorized signatory/director, a statutory
presumption is raised in favour of the complainant that the cheque in
question was issued for the discharge of a legally recoverable debt or
liability.

19. Relying upon the foundational facts, once the statutory presumption
has been raised in favour of the complainant, the burden of proof now
lies upon the accused to rebut the statutory presumption as per the
reverse onus of proof that now shifts upon the accused. It is now fairly
settled that the accused can displace this presumption on a scale of
"preponderance of probabilities" and the lack of consideration or a
legally enforceable debt or liability need not be proved beyond all
reasonable doubts. The accused can either prove that the liability did
not exist or make the non existence of liability so probable that a
reasonable person ought under the circumstances of the case, act upon
the supposition that it does not exist. This the accused can do either by
leading own evidence in his defence or by bringing out such
inconsistencies or contradictions in the case of the complainant which
go on to simply overthrow the complainant’s case.

20. The accused, in order to rebut the presumption taken in favour of

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 the complainant has taken a number of defences in the present case.
Primarily, it is stated by the accused that on the day when the cheque
was issued to the complainant and on the day of its presentation in the
bank, the accused did not owe the amount as mentioned on the cheque
in question since an amount of Rs 70,000/- had already been paid to the
complainant towards the transaction in issue. Secondly the goods
supplied by the complainant faced packaging defects due to which the
accused had returned the goods back to the complainant. Thirdly, it is
alleged that the cheque in question was merely issued as a security
cheque upon which no liability of the accused arises. Lastly the
complainant being a partnership firm , CW1 was neither competent to
file the complaint in its present form nor can his testimony be relied
upon. It is contended by the Ld counsel for the accused that taking into
consideration the said defences, the case of the complainant is liable to
dismissed.

21. First and foremost, the primary defence of the accused needs to
be examined for if established the same would result in overthrowing
the case of the complainant. It has been stated by the accused that prior
to the issuance of the cheque in question , a sum of Rs 70,000/- had
already been paid to the complainant and thus the liability of the
accused, if any, did not amount to the cheque amount.
The complainant has averred in the complaint that the accused
had before the dispatch of the goods to him inspected the premises of
the complainant and had issued the cheque in question for the amount
of Rs 1,88,000/-. The complainant had supplied the ordered goods to

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 the accused and had raised a bill of Rs 1,97,000/- . In support of his
averment ,the complainant has filed a document Ex CW1/6 stating the
same to be the invoice dated 06/09/2016 for the amount of Rs
1,97,000/-.

22. In his reply to the legal demand notice of the complainant which
is present on record as Ex CW1/5, the accused has clearly stated that
against the order placed with the complainant, the accused had paid to
the complainant, an amount of Rs 70,000/- in cash as advance payment.
The same was stated by the accused in his statement under section 313,
Cr.P.C as well as in his examination in chief as DW1. In order to prove
the same, the accused has placed on record Ex DW1/1 which is the
original voucher dated 18.06.2016 and which bears the signature of the
receiver Vipul Goel who is CW1 in the present case. A perusal of the
said document Ex DW1/1 shows that the same mentions that the
advance payment of Rs 70,000/-is paid to the complainant firm by the
accused company. The said document Ex DW1/1 has not been disputed
by the complainant and no other document has been presented in its
rebuttal. Interestingly DW1 who is accused no 2 was not even cross
examined on the genuinity or veracity of the said document Ex DW1/1
and no suggestions were put to the accused DW1 which would point
out that the signatures present on the said document were not of CW1.
Hence there is no reason to disbelieve the said document Ex DW1/1.
Moreover CW1 has in his cross examination admitted to the
receiving of the amount of Rs 70,000/- from the accused. The said fact
of receipt of Rs 70,000/- has however not been stated anywhere in the

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 complaint, legal demand notice or even in the affidavit in chief of CW1,
even though the accused had at the very first instance raised the same
in his reply to the legal demand notice. In his cross examination CW1
has simply stated that “ it is correct I have not mentioned in my
complaint about receiving an amount of Rs 70,000/- from the accused”.
He goes on to add voluntarily that the “same was not so mentioned as
the matter was only pertaining to the cheque in question.” That being
the factual position, the accused has been able to prove that he had
already made an advance payment of Rs 70,000/- to the complainant on
18.06.2016 towards the goods supplied by the complainant.
Although Ex CW1/6 which is stated to be the invoice dated
06/09/2016 is a mere photocopy and hence cannot be relied upon at this
stage, however the said fact of the bill being raised for Rs 1,97,400/-
has not been disputed by the accused. Thus even if it is said that the bill
raised for the goods so ordered by the accused was of Rs 1,97,000/- yet
the cheque in question which was presented in the bank was for an
amount of Rs 1,88,000/-. Thus the amount of Rs 70,000/- that was
already paid by the accused to the complainant was not set off by the
complainant at the time of the presentation of the cheque in question
which could have been done by the complainant by an indorsement to
that effect on the cheque in question. Further the legal demand notice
that was sent to the accused was for the entire amount of Rs 1,88,000/-
and not for the reduced liability of Rs 1,27,400/- after setting off the
amount of Rs 70,000/-, which was not legally permissible.

23. Ld counsel for the complainant has, at the time of addressing final

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 arguments in the case raised an argument that the amount of Rs 70,000/
was given by the accused for the purchase of a sample of goods from
the complainant and the same is evident from the date mentioned on the
invoice Ex CW1/6 which is dated 06/09/2016. It is argued that since the
amount of Rs 70,000/- was paid much prior to 06/09/2016 , it cannot be
said that the same was for the transaction in question. The said argument
of Ld counsel for the complainant seems to be a mere afterthought, for
filling in the loopholes in the case of the complainant. There is no
dispute about receiving of the amount of Rs 70,000/- from the accused.
The argument of it being paid for a sample and not for the transaction
in question has not been stated by the complainant in his cross
examination, when he was asked about the receipt of the sum of Rs
70,000/-. Moreover it has himself been stated by CW1 in his cross
examination that “It is correct that the complainant company has no
other claim except to the present complaint.” No proof has been filed
by the complainant either to rebut the document Ex DW1/1 presented
by the accused or to prove that the payment of Rs 70,000/- was for a
sample, totally unconnected to the present transaction in hand.
It is also to be observed that the complainant has nowhere stated
the date or month as to when the agreement was first entered into
between the parties for the purchase of the goods. The date on which
the parties had entered into an agreement for the purchase of the goods
is evident only from a perusal of Ex CW1/5 which is the reply to the
legal demand notice, where it is stated that an agreement had taken place
between the parties for supply of the goods on 18/06/2016. The said fact
has not been disputed anywhere by the complainant and Ex DW1/1

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 which is the voucher evidencing payment of Rs 70,000/- is also dated
18/06/2016. Thus there remains no doubt that the amount of Rs 70,000/-
was given as advance payment for the transaction in issue of Rs 1,
97,400/- .
The said argument of the Ld counsel for the complainant also
does not hold force because the cheque in question is itself dated prior
to the date of the invoice i.e 06/09/2016, where the complaint itself
states that the goods were delivered after the cheque in question was
issued. Thus it cannot be assumed that since the accused had given the
amount of Rs 70,000/- prior to the date of the invoice, the same was for
a sample and the same was not to be set off from Rs 197000/- which
was a different transaction.

24. In a nutshell, what comes from the above discussion is that on the
date when the cheque in question was presented in the bank, the accused
did not owe the amount as stated on the cheque in question, since he
had already paid part amount of the liability. Thus, on the date when the
cheque in question was presented in the bank, there was no legal
liability of the amount of the cheque in question of the accused towards
the complainant.

25. Ld counsel for the accused has placed reliance on the judgement
of the Hon’ble High Court of Delhi in M/s Alliance Infrastructure
Project Pvt. Ltd. and Ors. Vs. Vinay Mittal Crl. M.C. No.2224/2009
where the Hon’ble High Court had held that “ The question which
comes up for consideration is as to what the expression “amount of

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 money‟ means in a case where the admitted liability of the drawer of
the cheque gets reduced, on account of part payment made by him, after
issuing but before presentation of cheque in question.”
In relation to the said question it was observed that “If it is held
that the expression "amount of money" would necessarily mean the
amount of cheque in every case, the drawer of the cheque would be
required to make arrangement for more than the admitted amount
payable by him to the payee of the cheque. In case he is not able to make
arrangement for the whole of the amount of the cheque, he would be
guilty of the offence punishable under Section 138 of Negotiable
Instruments Act. Obviously this could not have been the intention of the
legislature to make a person liable to punishment even if he has made
arrangements necessary for payment of the amount which is actually
payable by him. If the drawer of the cheque is made to pay more than
the amount actually payable by him, the inevitable result would be that
he will have to chase the payee of the cheque to recover the excess
amount paid by him. Therefore, I find it difficult to take the view that
even if the admitted liability of the drawer of the cheque has got
reduced, on account of certain payments made after issue of cheque, the
payee would nevertheless be entitled to present the cheque for the whole
of the amount, to the banker of the drawer, for encashment and in case
such a cheque is dishonoured for wants of funds, he will be guilty of
offence punishable under Section 138 of Negotiable Instrument Act.
I am conscious of the implication that the drawer of a cheque may
make payment of a part of the amount of the cheque only with a view
to circumvent and get out of his liability under Section 138 of

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 Negotiable Instrument Act. But, this can easily be avoided, by payee of
the cheque, either by taking the cheque of the reduced amount from the
drawer or by making an endorsement on the cheque acknowledging the
part payment received by him and then presenting the cheque for
encashment of only the balance amount due and payable to him. In
fact, Section 56 of Negotiable Instrument Act specifically provides for
an endorsement on a Negotiable Instrument, in case of part-payment
and the instrument can thereafter be negotiated for the balance amount.
It would, therefore, be open to the payee of the cheque to present the
cheque for payment of only that much amount which is due to him after
giving credit for the part-payment made after issuance of cheque.”
“ When the principal amount claimed in the notice of demand is more
than the principal amount actually payable to the payee of the cheque
and the notice also does not indicate the basis for demanding the excess
amount, such a notice cannot be said to be a legal and valid notice
envisaged in Section 138(b) of Negotiable Instrument Act. In such a
case, it is not open to the complainant to take the plea that the drawer of
the cheque could have escaped liability by paying the actual amount due
from him to the payee of the cheque. In order to make the notice legal
and valid, it must necessarily specify the principal amount payable to
the payee of the cheque and the principal amount demanded from the
drawer of the cheque should not be more than the actual amount payable
by him though addition of some other demands in the notice by itself
would not render such a notice illegal or invalid.”

26. The above ratio was reiterated by the Hon’ble High Court of

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 Gujarat in the case of Shree Corporation vs Anilbhai Puranbhai
Bansal R/SCR.A/3653/2012.

27. In the present case the complainant had presented the cheque in
question for an amount which was more than what was actually due to
him and had sent the legal demand notice for the cheque amount, which
was neither the actual amount of the legal liability so due nor the amount
towards part payment of the legal liability. The legal demand notice
does not bear any mention of Rs 70,000/- which was received as
advance payment. That being so, the very first ingredient of the offence
is not made out since the cheque cannot be said to have been given in
discharge of the whole or part amount of the liability owed to the
complainant.
Further the legal demand notice by not referring to the amount
already paid by the accused and making a demand for an amount more
than actually due to the complainant, besides invalidating the legal
demand notice, also goes on to discredit the credibility of the
complainant. The legal demand notice which is one of the essential
ingredient of the offence under section 138 of N.I.Act, being invalid,
the accused cannot be made liable for the said offence.

28. As far as the other defences taken by the accused are concerned,
a lot of emphasis has been made throughout the trial to the defence that
the goods actually supplied by the complainant were packed in a
defective packaging and the accused had received several complaints
regarding packaging of the goods from the distributers of the goods.

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 The said defence has repeatedly been stated in the reply to the legal
demand notice, the notice under section 251 Cr.P.C., the statement of
the accused under section 313 Cr.P.C and in his examination in chief of
DW1. Per contra, the complainant in his cross examination has stated
that although the complaint regarding packaging of the goods was
received from the accused yet with respect to the defect in packaging it
was stated by the complainant that “the packaging part was not
pertaining to us. The cartons were supplied by accused himself.” It was
also stated that the cardboard boxes in which the spices were to be
packed were provided by the accused. Further in the complaint it has
been stated that the goods were dispatched after an inspection of the
packed goods had been done by the accused. Ld counsel for the
complainant has also stated that the accused has himself in his statement
under Section 313, Cr.P.C stated that the entire packaging material was
provided to the complainant by the accused and hence it cannot be said
that there was a defect in the packaging of the goods on account of the
complainant.

29. It has also been stated by the accused in his statement under
section 313, Cr.P.C and in his examination in chief as DW1 that the
goods were returned back to the complainant. The same has however
not been stated by the accused in his statement under section 251 Cr.P.C
and in the reply to the legal demand notice. In the reply to the legal
demand notice it was stated that the complainant should take back the
goods from the premises of the accused company. Further no date has
been stated by the accused as to when the goods were actually returned

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 to the complainant. Reliance has been placed upon Ex DW1/2 which is
stated to be the office copy of the challan for returning the goods to the
complainant. Even though the complainant has not filed any document
in rebuttal of the same yet whether or not there was actually a defect in
packaging and if yes whether the said defect was due to the conduct of
the complainant or the accused and resultantly whether there was a
breach in the terms of the agreement are questions which can be agitated
between the parties in a civil action. In the facts of the present case,
criminal liability cannot be fastened when the requirement as to the
'existing legal liability' does not stand satisfied.

30. As far the defence of the accused that the cheque was given as a
security cheque in advance, is concerned the law with regard to cheques
given in advance is laid out in Sampelly Satyanarayana Rao v. Indian
Renewable Energy Development Agency Limited, criminal
APPEAL NO. 867 OF 2016 wherein the Hon’ble Apex Court had
in relation to such cheques held that” If on the date of the cheque,
liability or debt exists or the amount has become legally recoverable,
the Section is attracted and not otherwise.” Therefore on account of the
said law as well, no offence under section 138 NI Act is attracted since
on the date of the cheque, liability of the amount of the cheque was not
actually due to the complainant.

31. The accused has also stated that CW1 was not competent to file
the complaint and depose as no authority or power of attorney has been
filed to prove the competence of CW1. It is a well settled law that a

CC No. 21/16 M/s Dhanraj Shree Kishan Das vs. Royal Varsha Industries Pvt. Ltd. Page No. 20 of 22
 partner has the authority to file a complaint under section 138 NI Act if
the payee is a partnership firm. The present case has been filed by the
complainant firm through the partner. In his cross examination, CW1
has stated that he is the partner of the complainant firm. The same has
been stated in the complaint as well. A perusal of the document Ex
DW1/1 relied upon by the accused himself bears the name of CW1 Mr
Vipul Goel on behalf of the firm as the receiver and his signatures. There
is no legal requirement of filing of a formal power of attorney or an
authority letter in case of a partner who is legally authorized to file a
complaint on behalf of the firm. Ld counsel for the accused has also
raised an argument that there is no proof of the registration of the
partnership that has been filed and hence an unregistered partnership
firm could not have filed a complaint under section 138 NI Act. In this
regard, the argument of the ld counsel for the accused is misconceived
since the bar to section 69(2) of the Indian Partnership Act does not
apply to the proceedings under section 138 NI Act. Therefore whether
the complainant firm was a registered or unregistered partnership firm
is immaterial for deciding the dispute in hand.

32. In light of the foregoing reasons, since in the present case the
cheque having not been issued for an existing debt or liability on
account of the part payment already made and the legal demand notice
being an invalid notice, the ingredients of offence u/s 138 of the NI
Act are not fulfilled, resultantly both the Accused No. 1 company
namely Royal Varsha Industries Pvt. Ltd and Accused No 2 namely

CC No. 21/16 M/s Dhanraj Shree Kishan Das vs. Royal Varsha Industries Pvt. Ltd. Page No. 21 of 22
 Ashutosh Vijay are acquitted for offence u/s 138 of the N.I.Act.

Announced by way of proceedings

conducted through video conferencing.

TISTA
Dated 07.07.2020. Digitally signed
by TISTA SHAH

SHAH
Date: 2020.07.07
13:13:15 +05'30'

(Tista Shah)
MM-06/NI Act/Central District
Tis Hazari Court/Delhi.

CC No. 21/16 M/s Dhanraj Shree Kishan Das vs. Royal Varsha Industries Pvt. Ltd. Page No. 22 of 22
M/
sDhanr
ajShr
eeKi
shanDasv
.Roy
alVar
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ndust
ri
esPv
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d.&or
s.

CCNo.21/
16

07.
07.
2020

Mat
tert
akenupt
odayt
hroughvi
deoconf
erenci
ng.
Pr
esent
:- Compl
ainanti
nper
sonwi
thLd.Counsel
Sh.Ni
ti
nBansal
.

Accusedno.1i
sacompany
.

Accusedno.2Ashut
oshVi
j
ayi
nper
sonwi
thLd.CounselSh.Manoj
Kumar.

Thepresentmatt
erwaslistedforj
udgment.However
,ont hefi
xeddate,
duet osuspensi
onoft hecour
twor kbyt heHon’bl
eHighCour tofDelhion
accountoftheongoingpandemicofCov id-
19andt heconsequentl
ockdown
order
edbytheGov er
nmentofI
ndia,t
hepresentmat
terwasadjour
ned.

Now, t he presentmat teri s being t aken up int erms ofor derno.

16/DHC/ 2020 dat ed 13. 06.
2020 passed byt heHon’ bleHi gh CourtofDel hi
communi cated to t
his cour t t hrough order no. 11598-
11728/ DJ/ Centr
al/
Lockdown Cov id-19/AD & SJ Dut y & Ar r
angement s/2020
dated14. 06.2020passedbyl earnedDi st
rictandSessi onsJudge( HQ)Del hi
.The
mat t
erisaccor dinglypr eponedandf ixedf ortoday .Ther eaderoft hecourtwas
di
rectedt ocont actther espect ivecounsel soft hepartiest elephonical
lyont he
number spr ovi
ded on t he respect i
vev akalatnamasi nformi ng them thatt he
proceedingsi nt hepr esentcaseshal ltakepl acethroughv i
deoconf erencing.
Boththepar ti
esaswel last hei rcounsel shadcommuni catedt otheReadert hei r
consensusonpar t
ici
pat iont hroughv ideoconf erenci
ng.Accor dingl
y,thepresent
mat t
erist akenupt odayf orpr onouncementofj udgmenti nthepr esentcase.

Vi
de separat
ej udgmentofev en dat
e,accused no.1 companyRoyal
VarshaI
ndustr
iesPvt.Ltd.Andaccusedno.2AshutoshVij
ayar
eacquitt
edoft
he
off
encepuni
shableunderSection138NIAct .

Theaccusedhassubmitt
edthatt
hebai
lbondsalr
eadyf
urni
shedonr
ecor
d
beaccept
edforthepurposesofSecti
on437ACr.P.
C.Thesamehasnotbeen
opposed.Consi
der
ingt
heabov
eandi
nvi
ewoft
hepr
evai
l
ingci
rcumst
ancesof

(
2)

Covi
d-19,t
hebailbondsal
readyonr
ecor
dar
eext
endedasaccept
edf
ort
he
pur
poseofSect
ion437ACr.
P.C.

Fi
lebeconsi
gnedt
orecor
droom af
terduecompl
iance.

(
Announcedbywayofproceedi
ngsconduct
ed
t
hroughvi
deoconf
erenci
ng).

TISTA Digitally signed

by TISTA SHAH
Date:

SHAH 2020.07.07
14:29:57 +05'30'

(
Tist
aShah)

MM-
06,
NIAct
,THC,
Cent
ral

Del
hi,
07.
07.
2020