Delhi District Court
Technology Information, Forecasting … vs Ms Stan Pack Pharma Pvt Ltd Ors on 21 December, 2024
IN THE COURT OF SH. SIDDHANT KUMAR,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT)-06,
SOUTH DELHI DISTRICT, SAKET, NEW DELHI
JUDGMENT
DLST020013142015
CT Cases 465604/2016
Technology Information, Forecasting And Assessment Council
(TIFAC) Vs. Ms Stanpack Pharma Pvt Ltd Ors
PS : Safdarjung Enclave
Technology Information, Forecasting and
Assessment Council (TIFAC)
Regd. Office at Vishwakarma Bhavan,
Shaheed Jeet Singh Marg, New Delhi-110016
…………..Complainant
Versus
M/s Stanpack Pharma Pvt. Ltd.,
Regd. Office at A-13, Three Star,
CHS, Chedda Nagar, Chembur, Mumbai-400089
Also at Factory; Manpura-Dhela Road,
Village-Doduwal, PO-Lodhi Majra, Tehsil-Nalagarh,
(near Baddi) Distt-Solan, Himachal Pradesh-174101
………….. Accused No.1
Sh. Sanjay K Prasad,
(Managing Director of M/s Stanpack Pharma Pvt. Ltd.)
Regd. Office at A-13, Three Star,
CHS, Chedda Nagar, Chembur, Mumbai-400089
Also at Factory; Manpura-Dhela Road, Village-Doduwal,
PO-Lodhi Majra, Tehsil-Nalagarh, (near Baddi)
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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Distt-Solan, Himachal Pradesh-174101
Also at 201, Sunrise Apartment, Plot No.100, Sector-16,
Koperkhairne, Navi Mumbai-400709
………….. Accused No.2
Date of registration : 05.08.2015
Date of Judgment : 21.12.2024
Decision : Conviction
FACTS
1. The instant proceedings have originated out of a complaint
filed by Technology Information, Forecasting and Assessment
Council (TIFAC) against Ms Stanpack Pharma Pvt Ltd Ors for
the offense under Section 138, Negotiable Instruments Act, 1881
(hereinafter referred to as “NI Act“).
2. Brief facts of the complaint is that the complainant is a
society registered under the Societies Registration Act of 1860.
The accused no.1 is a company, and accused no.2 is the
Managing Director of the company. The accused company
approached the complainant for Technology Development
Assistance (TDA) of Rs. 1,60,00,000/- for the development of
the products ‘Stevioside and Lycopene’. Pursuant to this, the
parties entered into a Technology Development Assistance
Agreement (TDA Agreement) on 11.09.2008. In compliance
with the TDA Agreement, the accused company executed a Deed
of Hypothecation dated 24.11.2008, creating security for the
repayment of the aforesaid TDA Assistance by hypothecating all
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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movable properties, machinery, equipment, etc.
3. Pursuant to the TDA Agreement, the complainant
disbursed and released the said amount of Rs. 1,60,00,000/- as
financial assistance to the accused. As per the terms of the TDA
Agreement, the accused was required to repay the complainant
an amount of Rs. 1,92,00,000/- in ten equal half-yearly
installments of Rs. 19,20,000/- each. The installments were
scheduled to commence from 12.03.2011 to 12.09.2015, as per
Annexure III of the TDA Agreement.
4. In terms of the agreement, the accused issued 10 post-
dated cheques, to be presented on the due dates for the respective
installments. Out of the 10 post-dated cheques, the cheque in
question, for Rs. 19,20,000/-, duly signed by accused no.2, was
presented for encashment. The cheque was returned unpaid with
remarks “NPA account”. The complainant sent a legal notice to
the accused, demanding payment of the cheque amount. Despite
the notice, the accused failed to pay the amount. Consequently,
the present complaint was filed under Section 138 of the NI Act.
5. Additionally, 8 complaints filed by the complainant
against the accused are pending adjudication in this court. These
complaints arise out of the same transaction, involving the same
facts, and evidence has been recorded together in all these cases.
Each case pertains to one of the cheques issued under the TDA
Agreement. Therefore, all these cases are being decided together.
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
2024.12.21
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TRIAL
6. In support of their case, the complainant had led pre
summoning evidence by way of affidavit i.e. Ex.CW-1/A which
reiterated the contents of the complaint. He relied upon the
following documents filed alongwith the complaint :
(i) Authority letter dated 01.11.2023 as Ex.CW-1/1;
(ii) Technology Development Agreement dt 11.09.2008
(TDA) and Hypothecation deed dt 24.11.2008 as
Ex.CW-1/2 (colly);
(iii) Minutes of meetings of Advisory & Monitoring
Committee (AMC) as Ex.CW-1/3 (colly);
(iv) Letter dt 28.03.2011, 24.05.2011 & 13.06.2011 of
the accused addressed to the complainant as Ex.CW-1/4
(colly);
(v) Letters sent by complainant to accused dt
06.05.2011, 17.06.2011 & 20.07.2011 as Ex.CW-1/5
(colly);
(vi) Letter dt 01.08.2011 sent by complainant to accused
as Ex.CW-1/6;
(vii) The original cheque as Ex.CW-1/7;
(viii) Original cheque deposit slip as Ex.CW-1/8;
(ix) Original cheque return memo as Ex.CW-1/9;
(x) Legal Notice as Ex. CW-1/10;
(xi) Original postal receipts as Ex.CW-1/11;
Digitally
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SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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(xii) Original returned envelopes containing the original
demand letter/notice as Ex.CW-1/12;
(xiii) Original AD card/postal delivery report as
Ex.CW-1/13.
7. Summons were issued to the accused company and its
director on 17.11.2015. The accused entered their appearance on
27.05.2019. As the offense is bailable, the accused was granted
bail.
8. Substance of accusation/notice u/s 251 Cr.P.C. was served
to the accused on 30.09.2021. The accused pleaded not guilty and
claimed trial. Accused no.2 (managing director of accused no.1)
admitted that the cheque belongs to him and also admitted his
signatures on the same but denied filling the rest of the details.
He denied receiving the legal demand notice. He stated that he
entered into a partnership agreement with the complainant and he
had given blank signed cheques as prerequisite to sign the
agreement. Thereafter, the Government of India banned the
product in respect of which the agreement had entered into. He
denied liability towards the complainant.
9. In view of the nature of evidence sought to be brought on
record and the allegations made, the trial proceeded as a
summons trial. The accused was allowed to cross examine the
complainant witness u/s 145 (2) of NI Act.
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
2024.12.21
16:14:52
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10. The AR of the complainant was examined as a
complainant witness CW-1, who tendered his affidavit
Es.CW-1/A into evidence. He also relied upon various
documents on record from Ex.CW-1/1 to Ex.CW-1/12. CW-1
was duly cross examined by Ld. counsel for the accused on
29.01.2024, 28.03.2024 and 12.04.2024. Several questions with
respect to the agreement between the parties as well as the
authority of the AR to represent the complainant were asked
from the witness. No other witness was examined by the
complainant and thereafter CE was closed.
11. Statement of accused u/s 313 Cr.P.C was recorded on
13.08.2024. In his statement, the accused stated that he had
issued blank signed undated cheques which was a precondition
for signing the agreement by TIFAC. The accused had
approached them for a grant, the amount contributed by TIFAC
was to be converted into a grant. He further stated that it was a
joint venture wherein both parties had to invest in terms of
understanding and exploit the benefit jointly. The date on the
agreement has not been countersigned by him. The complainant
was supposed to return the blank signed cheques and issue new
ones after mutual discussion which never happened. Article 12 of
the agreement clearly mentions that profitability and the
patenting rights had to be shared. He also stated that his account
had turned NPA in the year 2011. He denied liability for the
cheques amount. He also stated that Annexure 3 of the agreement
dated 11.09.2008 had to come into picture only once
Digitally
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SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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commencement of the product happened. However, in the
present case no commencement happened as the product was
declared illegal thus there was no liability against the cheques in
question. The accused chose to lead defense evidence and
thereafter the matter was listed for DE.
12. Ld. Counsel for the accused filed an application u/s 315
CrPC to examine the accused as a witness. The accused testified
on oath as DW-1. He filed his evidence by way of affidavit Ex.
AW-1/A and relied upon documents Ex.AW-1/1 and
Ex.AW-1/2(colly). In his chief he stated that the complainant,
TIFAC, and Accused No. 1 entered into a joint venture to
develop the “Stevia” product with shared profitability and patent
rights. TIFAC was to provide Rs. 169 lakhs, and Accused No. 1
was to contribute Rs. 162.05 lakhs. The project costs exceeded
the estimates due to additional expenditures by Accused No. 1.
However, the project became unviable after the government
declared “Stevia” illegal in 2011, resulting in its failure. Clauses
in the agreement outlined fund recovery based on project success
or failure. As the project did not commence, repayment
obligations under Clause VI were nullified. Accused No. 1 issued
undated blank cheques to TIFAC as a pre-condition to
demonstrate seriousness, not for repayment. The cheques were
not linked to any enforceable liability. TIFAC contributed Rs.
1.60 crores, while Accused No. 1 contributed Rs. 1.84 crores.
Although the bank account was not a joint account, TIFAC
monitored expenditures. The cheques were dishonored without
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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prior notice due to the account being declared NPA in 2011.
13. He was duly cross examined and in his cross, the witness
admitted signing the TDA agreement and deed of hypothecation
but alleged that some pages were blank or altered. TIFAC’s
financial assistance of Rs. 1.60 crores was received and
monitored through Advisory and Monitoring Committee (AMC)
meetings. Accused No. 1 utilized these funds appropriately, with
no discrepancies reported. The witness stated that the undated
cheques were issued to satisfy TIFAC’s demand for
“demonstrating seriousness” toward the project and were not
intended for repayment. The project failed after the Food Safety
and Standards Authority of India (FSSAI) declared “Stevia”
illegal, leaving the venture unviable. The account of Accused No.
1 was classified as NPA in 2011, leading to the dishonor of
cheques. The witness denied any prior notice before dishonor and
reiterated that the cheques were not tied to legal liability.
14. Defense evidence was closed and the matter was listed for
final arguments thereafter.
ARGUMENTS
15. The learned counsel for the complainant submitted that the
liability for the cheques in question arises directly from the
agreement dated 11.09.2008 (TDA), which has not been denied
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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by the accused. The accused has admitted to signing both the
agreement and the cheques. Counsel emphasized the terms and
conditions of the agreement, wherein both parties were required
to invest their respective shares, and the accused issued 10 post-
dated cheques to the complainant towards the repayment of Rs.
196 lakhs as per the agreed disbursement schedule. Furthermore,
an advisory committee, including accused no. 2 as a member,
was appointed, and meetings were held to implement the terms of
the agreement.
16. It was argued that the cheques were issued in discharge of
a legally enforceable liability arising out of the agreement, which
provides documentary support for the complainant’s claim. The
complainant presented the cheques for encashment, but they were
dishonored upon presentation. A legal demand notice was duly
issued to the registered address of the accused, yet no payment
was made within the statutory time period.
17. The learned counsel further contended that the statutory
presumption under Section 139 of the Negotiable Instruments
Act is in favor of the complainant since the signatures on the
cheques are admitted. While the initial burden of proof lies on
the complainant, once the statutory presumption is invoked, the
onus shifts to the accused to rebut the presumption on a
preponderance of probabilities. In this case, it was argued that the
accused has failed to discharge this burden and rebut the
presumption. Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
2024.12.21
16:15:12
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18. Lastly, counsel highlighted that the liability is
unequivocally supported by the agreement, and the accused’s
failure to provide a credible defense reinforces the complainant’s
case. Thus, the complainant’s claim under Section 138 of the NI
Act is fully established based on the evidence and statutory
presumptions.
19. The learned counsel for the accused argued that the
agreement dated 11.09.2008 between the parties was not a loan
agreement but a joint venture arrangement. Both parties had
invested funds in the project, and these funds were to be
exclusively utilized for the intended project. It was submitted that
the project could only be deemed completed when the advisory
committee provided a written certification, but Annexure 1,
which purportedly contained this certification, was blank.
Consequently, no legally enforceable debt or liability arose at the
time the cheques were presented for encashment.
20. Counsel emphasized that the cheques were not issued in
discharge of any liability but were instead given merely to
demonstrate the seriousness of the accused in the project.
Furthermore, the accused contended that neither party possessed
the requisite license to produce stevia, which was the project’s
subject. The accused’s inability to obtain the license, coupled
with the declaration of the product as illegal, rendered the
agreement unenforceable. Hence, the cheques could not be
Digitally
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SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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considered as representing a legally enforceable debt.
21. The learned counsel further pointed out that some of the
cheques in question were barred by limitation as they should
have been presented for encashment by April 30, per the
repayment schedule outlined in the agreement. It was also argued
that the complainant’s witness (CW-1) was not duly authorized
to depose on behalf of the complainant society. As per law, only
the Registrar of the registered society could issue such
authorization, which was not done in this case.
22. Finally, the accused relied on the evidence on record,
particularly the cross-examination of CW-1, to substantiate their
defense. Counsel submitted that the complainant had failed to
establish the existence of a legally enforceable liability, and the
statutory presumption under Section 139 of the NI Act stood
rebutted. Thus, the accused prayed for acquittal in the absence of
conclusive proof of liability.
LEGAL POSITION
23. The presumptions under Section 139 of the NI Act are well
established through judicial pronouncements. As elucidated in
Basalingappa v. Mudibasappa, 2019 SCC OnLine SC 491, once
the execution of the cheque is admitted, the presumption arises
that the cheque was issued for the discharge of a debt or liability.
This presumption, however, is rebuttable, and the onus is on the
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
2024.12.21
16:15:23
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accused to raise a probable defense by demonstrating on a
preponderance of probabilities that no such liability exists. The
accused may rely on evidence brought by themselves or on
materials submitted by the complainant and other surrounding
circumstances to meet this standard of proof. Importantly, this
evidentiary burden does not necessitate the accused entering the
witness box.
24. In Rajesh Jain v. Ajay Singh, SLP (Crl.) No. 12802 of
2022, the Hon’ble Supreme Court emphasized that the activation
of the presumption under Section 139 shifts the evidential burden
to the accused. If the accused fails to rebut the presumption,
conviction may follow, subject to the satisfaction of the other
ingredients of Section 138. Conversely, if the evidential burden is
discharged, the complainant must independently establish the
liability through evidence without relying on the presumption.
The Court must then adopt a holistic approach based on the
evidence to decide the matter.
APPRECIATION OF EVIDENCE and FINDINGS
25. The issuance of the cheques and the signatures on them are
not disputed by the accused. Consequently, the statutory
presumptions under Section 118 read with Section 139 of the NI
Act are triggered. These presumptions establish that the cheques
were issued in discharge of a legally enforceable debt or liability
in favor of the complainant. As held in Basalingappa v.
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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Mudibasappa, 2019 SCC OnLine SC 491, once the presumption
is activated, the evidential burden shifts to the accused to rebut it
on a preponderance of probabilities. Similarly, in Rajesh Jain v.
Ajay Singh, SLP (Crl.) No. 12802 of 2022, it was reiterated that
unless successfully rebutted, the Court must proceed on the
presumption that the cheques were issued for a lawful liability. In
the present case, these principles apply squarely in favor of the
complainant.
26. The legal notice was duly sent to the registered address of
the accused company. Section 114 of the Indian Evidence Act,
read with Section 27 of the General Clauses Act, enables the
Court to presume that the notice, once properly addressed and
dispatched by post, was received by the addressee. The Hon’ble
Supreme Court in C.C. Alavi Haji v. Palapetty Muhammed &
Anr., (2007) 6 SCC 555, clarified that the requirement of notice
under Section 138 NI Act is distinct from typical criminal law
procedures and aims to afford the drawer an opportunity to make
the payment within 15 days of receiving summons, if not earlier.
The judgment further underscores that a drawer cannot evade
liability by disputing the receipt of notice when statutory
presumptions under Section 27 of the General Clauses Act and
Section 114 of the Evidence Act apply. In the present case, the
dispatch of the legal notice to the correct and registered addresses
suffices to meet the statutory requirement.
27. To determine whether the accused have successfully
Digitally
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SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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rebutted the statutory presumption under Sections 118 and 139 of
the NI Act, the defenses raised by them are analyzed as follows:
a) No liability arising out of the agreement – The accused
argued that the cheques were not issued in discharge of
any legally enforceable debt or liability but were merely
security instruments to demonstrate their seriousness in the
joint venture. They relied upon the terms of the agreement,
which, according to them, established a joint venture
between the parties. It was further contended that the funds
were to be utilized solely for the project, which could not
be completed due to the alleged illegality of the product
(stevia) and the failure to obtain the requisite license. This,
they claim, negates the existence of any enforceable
liability at the time of presentation of the cheques.
b) Liability Time-Barred: The accused asserted that the
liability, if any, was barred by limitation at the time of
presentation of the cheques, as the agreement did not
contemplate an enforceable debt arising beyond the
stipulated timeline for performance.
c) Lack of Authorization of AR: The accused challenged the
authority of the complainant’s witness, asserting that the
authorization relied upon was defective. They contended
that the complainant, being a registered society, could only
have issued authorization through the registrar. In the
absence of valid authorization, the testimony of the
complainant’s representative, they argued, cannot be relied
upon to substantiate the claim.
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
2024.12.21
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28. To determine whether the liability existed at the time of
the presentation of the cheques, the following analysis is derived
from the terms and conditions of the agreement.
29. Clause IX of the agreement unequivocally provides that
the accused company was required to repay the Technology
Development Assistance (TDA) through post-dated cheques
furnished at the time of executing the agreement. It expressly
states that repayment was to be made “without any conditions,”
eliminating any dependency on the project’s progress,
performance, or the accused’s financial circumstances. The
liability to repay was crystallized at the time of signing the
agreement, and the issuance of cheques was the mechanism for
fulfilling this binding obligation.
30. This provision establishes a clear financial liability on the
accused company for repaying the amount as per the agreed
schedule, irrespective of the project’s progress or completion.
The accused has admitted to executing the agreement,
acknowledging receipt of TDA from the complainant (TIFAC),
and signing the post-dated cheques, including the eight cheques
in question in the connected cases. These admissions reinforce
that the liability under Clause IX was valid and enforceable. The
cheques in question are part of the ten post-dated cheques
required under the repayment schedule provided in Annexure III.
The accused admitted to issuing and signing these cheques.
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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Therefore, their presentation reflects the enforcement of an
agreed repayment schedule and not any newly created liability.
31. The agreement provides a clear timeline for repayment in
Annexure III. The accused company agreed to repay the principal
amount along with a predetermined markup (1.2 times the
financial assistance) in ten installments. This structured
repayment obligation was not conditional upon any other factors.
The cheques’ presentation for payment aligns with the
predetermined installment plan, signifying that liability existed
when each installment became due. The cheques represent pre-
existing financial commitments agreed upon in the contract.
32. The accused company admitted to executing the
agreement, receiving TDA from the complainant (TIFAC), and
issuing post-dated cheques as stipulated. This acknowledgment
of receipt of financial assistance underlines that a repayment
obligation arose at the very inception of the contractual
relationship. The issuance of cheques was not merely symbolic
or intended for security but served as a binding repayment
mechanism as per the explicit terms.
33. Clause VI of the agreement further reinforces the
independence of the repayment obligation from the project’s
progress or outcome. It mandates that funds be utilized strictly
for the project and prohibits their diversion for other purposes.
Additionally, it grants TIFAC the right to unilaterally foreclose
Digitally signed
by SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
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the project and recover the released TDA amount with interest in
case of significant delays or lack of progress. This clause
demonstrates that TIFAC’s financial assistance was provided
with the expectation of unconditional repayment. The accused
company’s obligation to repay was not tied to the success,
failure, or completion of the project but was enforceable
regardless of these factors.
34. Clause XVI explicitly disclaims any joint venture or
shared risk arrangement between the parties. It states that TIFAC
shall not be responsible for any loss or damage suffered by the
accused company in the course of executing the project. This
provision undermines the accused’s defense that the agreement
constituted a joint venture or that repayment was contingent upon
mutual benefits or shared liabilities. The clause solidifies the
arm’s-length nature of the agreement, wherein TIFAC acted
solely as a financial and technical facilitator, while the accused
company assumed full responsibility for the project and
repayment.
35. The issuance of post-dated cheques, as per Clause IX and
Annexure III, was an integral part of the agreement. These
cheques were furnished at the time of signing and were meant to
ensure the accused company’s compliance with its repayment
obligations. Since the cheques were issued to discharge a pre-
existing debt, the liability for the amounts stated on the cheques
existed from the outset and continued until the cheques were
Digitally signed
by SIDDHANT
SIDDHANT KUMAR
Date:
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honored or returned unpaid.
36. In Sampelly Satyanarayana Rao v. Indian Renewable
Energy Development Agency Ltd. (Criminal Appeal No. 867 of
2016), the Hon’ble Supreme Court held that the determination of
whether a post-dated cheque represents a legally enforceable
liability under Section 138 NI Act depends on the nature of the
transaction. If a liability or debt exists at the time the cheque is
issued or becomes due as per an agreement, the dishonor of such
cheques attracts Section 138. Even if the cheques are described
as “security,” they will still represent liability if issued in
repayment of installments for a loan already disbursed. This
principle directly applies to the present case. In Sampelly
Satyanarayan Rao, the Court noted that cheques described as
“security” could still represent liability if linked to repayment
obligations in an agreement. The cheques in the present case,
though issued as part of a structured repayment mechanism, were
not contingent or conditional but were enforceable under the
agreed terms. Hence, the accused’s defense that the cheques were
mere security instruments is untenable.
37. Based on the agreement’s terms, the accused’s admissions,
and the purpose of the post-dated cheques, it is clear that liability
existed at the time of their presentation. The accused’s obligation
to repay the TDA, as per Clause IX and Annexure III, was
binding, unconditional, and enforceable. The cheques in question
are a direct representation of this liability. Therefore, the defense
Digitally signed
by SIDDHANT
SIDDHANT KUMAR
Date:
KUMAR 2024.12.21
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of non-existence of liability is wholly untenable in light of the
terms and conditions of the agreement.
38. The accused have argued that even if the complainant’s
case is prima facie made out, the cheques in question pertain to a
time-barred debt, relying on the repayment schedule outlined in
Annexure III of the agreement. According to the accused, the
first installment was due 30 months after the first payment from
TIFAC, with subsequent installments to follow as per the
specified intervals. It was contended that the cheques in question,
issued for these installments, were presented beyond the
stipulated timeline and, therefore, pertain to a time-barred
liability.
39. This defense is unsustainable both in law and on the basis
of the terms of the agreement. Article 55 of the Schedule to the
Limitation Act, 1963, prescribes a limitation period of three years
for initiating legal action from the date of the breach of contract.
Further, Article 113 provides a period of three years from the
date the right to sue accrues. In this case, the timeline for
repayment under Annexure III allows TIFAC to recall the entire
outstanding amount upon default, thereby extending the
enforceability of the liability. The agreement explicitly provides
that the complainant is not obligated to recall the amount
immediately upon any default, preserving the right to recover the
outstanding amount at any point after the breach within the
limitation period. Thus, the liability remains alive and
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
2024.12.21
CT Case No. 465604/2016 16:16:30
+0530
Technology Information, Forecasting and Assessment Council (TIFAC)
Vs. Ms Stanpack Pharma Pvt Ltd Ors Page No.19 of 23
enforceable under the agreement, keeping the complainant’s case
well within time.
40. Moreover, the repayment clause in Annexure III explicitly
states that, in the event of default in paying any installment
within the stipulated time, TIFAC “will have a right but it will
not be obligatory on its part to recall from the company the
whole amount of Rs. 1,92,00,000/- less paid by the company.”
This provision confers a continuing right on TIFAC to demand
repayment of the entire outstanding liability at its discretion,
thereby keeping the debt alive and enforceable beyond the initial
installment timeline. The accused’s contention that the liability
become time-barred overlooks this crucial contractual provision,
which expressly preserves the complainant’s right to recall and
recover the outstanding amount in the event of a default.
41. In light of the terms of the agreement and the provisions of
the Limitation Act, the liability associated with the dishonored
cheques was well within the limitation period. Accordingly, the
defense of the accused that the liability is time-barred is rejected
as being without merit.
42. The accused have contended that the complainant’s
Authorized Representative (AR) lacked the requisite authority to
represent the complainant, a registered society, and argued that
only the registrar could issue such authorization. However, this
defense is without merit, as the complainant has duly placed on
Digitally signed
by SIDDHANT
SIDDHANT KUMAR
Date:
KUMAR 2024.12.21
16:16:34
CT Case No. 465604/2016 +0530
Technology Information, Forecasting and Assessment Council (TIFAC)
Vs. Ms Stanpack Pharma Pvt Ltd Ors Page No.20 of 23
record documentary evidence in the form of Ex. CW-1/1, which
establishes the AR’s authority. As per Ex. CW-1/1, Mr. Mukesh
Mathur, empowered by the Governing Council of the
complainant via agenda item no. 7(B) of the minutes of the
meeting held on 29.10.2012, duly authorized Mr.
Chandrashekhar Tenikella to represent the complainant in
matters concerning the accused company. This evidence
demonstrates procedural compliance and negates the accused’s
contention regarding the AR’s lack of authority.
43. The Hon’ble Supreme Court in M/S M.M.T.C. Ltd. v. M/S
Medchl Chemicals & Pharma P. Ltd., 2002 (1) SCC 234,
addressed similar concerns and held that for juristic entities, such
as companies or societies, a natural person must represent the
entity in court. It was clarified that as long as the person
representing the entity is authorized through proper
documentation, the complaint is valid. The Court further
observed that even if there were any initial defect in
authorization, it could be rectified at a later stage, and such a
defect would not vitiate the proceedings. In the present case, the
authorization was provided through Ex. CW-1/1, and was duly
supported by the Governing Council’s decision. Furthermore, in
M.M.T.C. Ltd., it was emphasized that the complainant need only
satisfy the requirements under Section 142 of the Negotiable
Instruments Act, which mandates that the complaint must be
filed by the payee or the holder in due course of the cheque. The
AR in this case merely represents the payee complainant,
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
2024.12.21
16:16:39
CT Case No. 465604/2016 +0530Technology Information, Forecasting and Assessment Council (TIFAC)
Vs. Ms Stanpack Pharma Pvt Ltd Ors Page No.21 of 23
fulfilling the procedural requirement for a juristic entity to act
through a natural person.
44. The accused’s objection to the AR’s authority appears to
be a technical argument without substantive merit. The
authorization through Ex. CW-1/1, coupled with the
complainant’s compliance with statutory requirements,
sufficiently establishes the AR’s competence to prosecute the
case. Therefore, this defense, being unsupported by law or facts,
is rejected.
CONCLUSION
45. The ingredients of the offense under Section 138 of the
Negotiable Instruments Act are fully satisfied in this case. The
cheques in question were dishonored vide return memo dated
18.03.2013. A legal demand notice was sent to the correct
address of the accused company on 02.04.2013. Despite the
notice, the accused failed to make the payment within the
statutory period.
46. The cheques were issued for a legally enforceable liability
arising from the agreement between the parties. The issuance of
the cheques and the signatures on them were admitted by the
accused, triggering the legal presumption under Sections 118 and
139 of the NI Act. The accused failed to rebut this presumption
through the defenses raised. The liability of the accused is further
Digitally signed
by SIDDHANT
SIDDHANT KUMAR
Date:
KUMAR 2024.12.21
CT Case No. 465604/2016
16:16:43
+0530
Technology Information, Forecasting and Assessment Council (TIFAC)
Vs. Ms Stanpack Pharma Pvt Ltd Ors Page No.22 of 23
supported by the documentary evidence and the terms and
conditions of the agreement, which clearly established the
repayment obligation. Therefore, the complainant has
successfully proven its case beyond reasonable doubt.
47. Thus, on account of the appreciation of facts, evidence,
materials on record and the settled legal positions as discussed
above this court is of the considered opinion that the complainant
has successfully proven their case. Consequently, the court is
presented with a compelling basis to proceed with conviction,
holding the accused no.1 (company) and accused no. 2 (Director)
guilty for the offense under Section 138 of the Negotiable
Instruments Act.
This Judgment contains 23 pages and each page bears the
signature of Ld. Presiding Officer.
Copy of this judgment be given free of cost to the convict.
A copy of the order be uploaded on District Courts
website.
Pronounced in the open court Digitally signed today i.e. on 21.12.2024 SIDDHANT by SIDDHANT KUMAR KUMAR Date: 2024.12.21 16:16:48 +0530 (Siddhant Kumar) JMFC (NI Act-06) South District, Saket Courts, New Delhi 21.12.2024 CT Case No. 465604/2016
Technology Information, Forecasting and Assessment Council (TIFAC)
Vs. Ms Stanpack Pharma Pvt Ltd Ors Page No.23 of 23