Mona Modi vs State & Another
2009 Latest Caselaw 2478 Del

       IN THE HIGH COURT OF DELHI AT NEW DELHI

               CRL.REV.P. 345/2008 with Crl.MA. 9033 of 2008

                                        Reserved on: 20th May 2009
                                        Decision on: 6th July 2009

       MONA MODI                             ..... Petitioner
              Through Mr. Jayant Bhushan, Senior Advocate
              with Mr. Ajay Bhargava and Mr. Neeraj
              Chaudhari, Advocates

               versus

       STATE & ANR                           ..... Respondents
                Through Mr. Jaideep Malik, APP for State.
                Mr. Vikas Arora with Mr. Aman Khan,
                Advocate for R-2.

       CORAM:
       HON'BLE DR. JUSTICE S. MURALIDHAR

       1.     Whether Reporters of local papers may be
              allowed to see the judgment?                       No

       2.     To be referred to the Reporter or not?             Yes

       3.     Whether the judgment should be reported in Digest? Yes

                                  JUDGMENT

1. The challenge in this petition under Section 482 of the Code of

Criminal Procedure, 1973 (CrPC) is to an order dated 8th May 2006

passed by the learned Metropolitan Magistrate (MM), New Delhi

discharging Respondent No.2 in FIR No. 522/2003 under Sections

380/464/468/471 read with 34 IPC registered at P.S: Kalkaji.

2. The petitioner Mona Modi was for a short while the Director of

Parakram Technofab Ltd. (PTFL). She resigned in April 1999. PTFL

was engaged in the business of trading and exporting of textile fabrics.

The Respondent No.2 Mukesh Gupta was also a Director of PTFL

from 20th June 1996 to 1st July 1997. It is the case of the petitioner that

Aditya Modi and her husband Rajiv Modi were also Directors of

PTFL. She had a savings bank account No. 2679 with State Bank of

India (SBI), Greater Kailash Part-II Branch, New Delhi. It is her case

that used to keep some signed blank cheques with her husband at the

head office of PTFL for dealing with financial emergencies.

3. Reuben Solomon was the Managing Director of Butedean Ltd. and

Codev Textiles Ltd. both located at Manchester in England, engaged

in the business of trading and import of textile fabrics. Reuben

Solomon was a business associate of PTFL and it was on his

recommendation that Mukesh Gupta, Respondent No.2 was made a

Director of PTFL.

4. According to Mona Modi by a letter dated 2nd June 1999 addressed

to the SBI she closed her savings account No. 2679. She consequently

surrendered her cheque book. She also informed the SBI by the said

letter that she was unaware of the fate of two cheque Nos. 500703 and

500707 which were not traceable. On 9th June 1999 she also sent a

written communication to the Station House Officer (SHO) of the

Kalkaji Police Station for registering a complaint about the missing

cheques. She also enclosed with the said complaint a copy of her letter

dated 2nd June 2009 to the SBI closing her savings account.

5. On 3rd December 1999 Mona Modi received a letter from the GK

Branch of the SBI informing her that a cheque No.500707 for a sum

of Rs. 40 lakhs had been received through Deutsche Bank Ltd. for

clearance and that it had been returned by the SBI with the noting

"account since closed". In the month of December 1999 a notice was

received by Mona Modi from the Advocate for Reuben Solomon

regarding the dishonour of the cheque No.500707. It was claimed in

the said notice that the cheque had been issued in the sum of Rs. 40

lakhs towards the discharge of liability of the PTFL towards Butedean

Ltd. and Codev Textiles. The complainant was called upon to make

the payment of Rs. 40 lakhs to Reuben Solomon failing which

criminal proceedings under Section 138 of the Negotiable Instruments

Act 1881 (NI Act) would be initiated. The said notice was replied by

the lawyer of Mona Modi and her husband Rajiv Modi on 6th January

2000 stating that the said cheque had been found missing by Mona

Modi at the time of closing her savings account with the SBI; that the

said cheque was never issued for any amount in favour of Reuben

Solomon and therefore it was obviously a stolen cheque which was

subsequently filled up and presented to the SBI.

6. In January 2001 Reuben Solomon through his power of attorney

filed Criminal Complaint Case No. 3991/1 of 2004 titled "Reuben

Solomon v. Parakram Technofab Ltd. & Ors." in the Court of the

learned Metropolitan Magistrate (MM) New Delhi. By an order dated

31st January 2001 the learned MM summoned inter alia Mona Modi

for the offence under Section 138 NI Act. By an order dated 27th

October 2004 the learned MM dismissed the application filed by the

accused for recalling of the summoning order.Aggrieved by the said

order, Mona Modi filed Crl.M.C. No. 3033 of 2004 in this Court.

7. On her part, Mona Modi filed a complaint along with an application

under Section 156(3) CrPC in the Court of the learned MM on 21 st

January 2003. This was under Sections 378/380/464/468/471 IPC read

with 34 IPC. Along with the complaint a report of the handwriting

expert was enclosed which showed that Mukesh Gupta had himself

filled up the stolen cheque No. 500707 in his handwriting. It was

prayed that a direction should be issued to the PS Kalkaji to

investigate the offence. Consequent upon the directions issued by the

learned MM an FIR No. 522/2003 registered at PS Kalkaji and the

cognizance of the offence was taken against Mukesh Gupta by the

learned MM by the order dated 13th April 2005. Aggrieved by this

order Mukesh Gupta filed Crl. MC. No. 4122 of 2005 in this Court.

8. The petition by Mona Modi being Crl.MC. No. 3033/2004 and the

petition by Mukesh Gupta being Crl.MC No. 4122 of 2005 were heard

together and disposed of by the order dated 21 st February 2008. This

Court was informed that in FIR No. 522 of 2003 charges were yet to

be framed and the trial was yet to commence. Consequently the

following order was passed in both the cases:

"15. Keeping in view the above facts and circumstances these two petitions are disposed of by directing as under:

(a) The learned ACMM New Delhi will now place both the criminal case arising out of FIR No. 522/2003 and Criminal Complaint Case No. 391/1 of 2004 titled "Reuben Solomon v. Parakram Technofab Ltd." before the same MM.

(b) The learned MM will proceed to hear argument and pass an order on charge in FIR No. 522/2003 on or before 31st March 2008.

(c) The trial if any in FIR No. 522/2003 should be completed within six months thereafter, or on or before 1st October, 2008 whichever is later. The six months‟ period would exclude the period during which any interim order, if any, passed by the revisional court, subsists.

(d) After the conclusion of the trial and the judgment in FIR No. 522/2003 further

proceedings in Criminal Complaint Case No. 391/1 of 2004 should commence. Till then the trial in Criminal Complaint Case No. 391/1 of 2004 shall remain stayed."

9. By the impugned order dated 8th May 2008, the learned MM

discharged Mukesh Gupta of the offences in FIR No. 522/2003. In the

said order it was noticed that the police investigated the case after

registering the FIR. The police opined that prima facie the offences

under Sections 380/467468/471/34 IPC were made out against

Mukesh Gupta and that he had committed the offence under Section

380 IPC in connivance with Reuben Solomon. As regards Reuben

Solomon since his whereabouts were not known and he was stated to

be in the UK, his name was placed in Column 2. The prosecution

reserved to itself the right to file a supplementary charge sheet.

According to Mukesh Gupta he was the power of attorney holder of

Reuben Solomon, who was the Managing Director, Butedean Ltd. and

Codev Textiles Ltd. It was stated that by Invoice Nos. 152 and 152A

dated 8th March 1997 PTFL sent fabrics to Butedean Ltd. and Codev

Textiles which were cleared against full and final payment. However,

the entire lot on arrival in England was found to be defective. The

matter was brought to the notice of the Directors of PTFL and the

goods were sent back to India. It is claimed that Directors PTFL

agreed to take the goods back and also pay compensation. In June

1998 goods were sent back to India against two bills dated 23rd March

1998 and 1st June 1998. However, the bills were not settled by PTFL

or its Directors. Reuben Solomon the Managing Director of Butedean

Ltd. and Codev Textiles Ltd. was authorized to collect the debt. It was

alleged that a settlement was arrived at between the parties in

February 1999 and a post-dated cheque No. 500707 dated 3rd

November 1999 was issued by Mona Modi in favour of Reuben

Solomon in the sum of Rs. 40 lakhs. A cheque when presented by

Reuben Solomon through his bank was dishonoured with the remarks

"account closed".

10. The learned MM held that the Mona Modi could not be held to be

in possession of the dishonoured cheque as she had stated that she

handed them over to her husband and her brother-in-law. There was

no explanation why she had not earlier made a complaint about

cheques Nos. 500703 and 500707 being missing. There was no

explanation why the PTFL had written the letter dated 18th February

1999 to its banker stating that the payment ad been postponed to some

future date. Therefore, there was a doubt about the case of the

complainant that there was no liability of PTFL towards the UK

company and definitely not to the extent of Rs. 40 lakhs. The learned

MM then proceeded to analyze the statement of accounts of Mona

Modi and reasoned that when the balance was never more than the

Rs.1000/- there was no utility in keeping the blank cheques with the

PTFL for financial „exigencies‟. Therefore, this explanation by Mona

Modi was doubted. Applying the judgment of the Supreme Court in

Union of India v. Prafulla Kumar Samal, (1979) 3 SCC 4 it was held

that the benefit of doubt should go the accused. Accordingly the

respondent Mukesh Gupta was discharged. It is submitted that the

complainant gave a representation to the Director of Prosecution for

filing a revision petition. When the latter failed to take any action, the

present petition was filed. By an order dated 31st July 2008, the

impugned order dated 8th May 2008 passed by the learned MM was

stayed by this Court.

11. It is submitted by Mr. Jayant Bhushan, learned Senior Counsel

appearing for the petitioner that the learned MM grievously erred in

discharging the accused. At the present stage, the learned MM was not

expected to analyze the evidence in great detail to test its veracity. He

referred to the decisions in Union of India v. K.K Pradhan (1987) 2

SCC 17 and Sanghi Bros. (Indore) (P) Ltd. v. Sanjay Choudhary

(2008) 10 SCC 681. He submitted that Mukesh Gupta gave a

statement in writing to the police that the cheque had in fact been

filled up in his handwriting. Documentary evidence was also filed by

the Reuben Solomon to the effect that the cheque had been filled up in

the name of the company by Mukesh Gupta. Further the invoice

against which the payment was supposed to have been made was in

the sum of Rs.15 lakhs whereas the cheque amount was Rs. 40 lakhs.

The learned MM also failed to appreciate that there was no occasion

for Mona Modi to issue a cheque in discharge of liability of PTFL

when she had by then already resigned from the directorship of the

said company. The learned MM also completely ignored the fact that

she had in June 1999 informed both the SBI and the police of the loss

of the cheques. Therefore, it was not as if the theft of the cheque was

an afterthought. The fact that Mukesh Gupta was in possession of the

cheque was evident from the fact that he acted as the agent of the

Reuben Solomon and presented the cheque for payment. It was

submitted that the order of the learned MM was based purely on

surmises and conjectures and ought to be set aside.

12. Appearing for the respondents it is submitted by Mr. Vikas Arora,

the learned counsel for the Respondent Mukesh Gupta that Reuben

Solomon himself had confirmed that Mona Modi issued a cheque to

meet the liability of the PTFL. When she herself stated that she left

the cheques with her husband for meeting financial liabilities of the

company, she could not wriggle out from the liability of PTFL

towards the discharge of which she had issued the cheque. It is

submitted that the learned MM was justified in coming to the

conclusion that the evidence adduced by the complainant Mona Modi

was wholly unbelievable. When there was no balance in the closed

saving bank account clearly the accused had never any intention in

making payment. The cheque was issued knowing fully well that it

would be dishonoured when presented for payment. The complaint

case was filed by Mona Modi only in January 2003 much after the

complaint filed against her under Section 138 NI Act. This complaint

was therefore malafide. The explanation for the cheque being issued

in the sum of Rs. 40 lakhs was that there was a settlement between the

parties and it was agreed that the amount payable would include the

total of the cost of goods as well as the handling charges, godown

charges, customs, damages etc.

13. The submissions of the learned counsel have been considered. The

scope of the proceedings before the learned MM at the stage of charge

was only to examine if a case of grave suspicion was made out against

the accused for the offences for which he was sought to be proceeded

against. The court was not expected to analyze the evidence in great

detail to ascertain if the accused could be held guilty of the offence

beyond reasonable doubt. The Supreme Court has in Prafulla Kumar

Samal explained the scope of the powers of the trial court under

Section 227 CrPC as under (SCC, p.7):

"The words "not sufficient ground for proceeding against the accused" clearly show that the Judge is not a mere post office to

frame the charge at the behest of the prosecution, but has to exercise his judicial mind to the facts of the case in order to determine whether a case for trial has been made out by the prosecution. In assessing this fact, it is not necessary for the court to enter into the pros and cons of the matter or into a weighing and balancing of evidence and probabilities which is really his function after the trial starts. At the stage of Section 227, the Judge has merely to sift the evidence in order to find out whether or not there is sufficient ground for proceeding against the accused. The sufficiency of ground would take within its fold the nature of the evidence recorded by the police or the documents produced before the court which ex facie disclose that there are suspicious circumstances against the accused so as to frame a charge against him."

14. Likewise in Sanghi Bros. (Indore) (P) Ltd. v. Sanjay Choudhary

(2008) 10 SCC 681 it was observed that "The court has to see while

considering the question of framing the charge as to whether the

material brought on record could reasonably connect the accused with

the trial. Nothing more is required to be inquired into."

15. In the instant case the cheque in question was purportedly issued

by Mona Modi in her personal capacity and not as a Director of PTFL.

Clearly it is not the case of the accused that the cheque was issued by

PTFL in discharge of its liability. However, the liability sought to be

enforced is that of PTFL towards Codev Textiles Ltd. It is also

significant that the cheque was not issued in favour of Codev Textiles

Ltd. which raised the invoice. It was issued in the individual name of

Reuben Solomon. This prima facie probalises the case of Mona Modi

that the cheque was not issued towards the discharge of the liability of

the PTFL towards Codev Textiles Ltd. However, according to

Mukesh Gupta this was the transaction which led to the issuance of

the dishonoured cheque. The explanation why the cheque was in the

sum of Rs.40 lakhs while the liability in terms of the invoice in

question was Rs.15 lakhs has to be tested by leading evidence.

Likewise there is merit in the contention of the learned Senior counsel

for the petitioner that the statement made by Mona Modi to the police

that she had kept some blank cheques signed in her husband‟s office

for meeting financial „emergencies‟ has been wrongly read as

„exigencies‟ by the learned MM. She clearly mentions that the said

two cheques, i.e., 500703 and 500707 were found missing and that

she gave a complaint to this effect to the police and also informed the

bank likewise while closing her savings account. She specifically

alleged that Mukesh Gupta had dishonestly removed the blank

cheques from the head office and in conspiracy with the Reuben

Solomon filled up the cheque in question in his own handwriting. She

also enclosed the report of the handwriting expert. This report is also

on record.

16. Much is sought to be made by the learned counsel for the

respondent of the replies given by Mona Modi to the questions raised

by the police. One of the questions was "how many time blank

cheques were kept in the office and how many had been used?" The

answer was: "One signed blank cheque was always kept in the office.

On the same being used another would be got signed from me." From

this it is sought to be contended that the complainant was changing

her versions from time to time. She had stated that the two blanks

cheques were missing and now she stated that the one cheque was

missing. In the considered view of this court there is no apparent

material contradiction in this reply. It must be remembered that

cheque Nos. 500703 and 500707 were missing which perhaps the

complainant did not notice immediately. Thereafter, two cheques were

issued. Thereafter one more signed cheque was found missing. It is

possible that the complainant noticed the missing cheques only when

the statement of account was seen by her. Nothing much therefore

turns on these replies. In any event a clearer picture about the veracity

of these statements can emerge only after evidence is led.

17. There was another question asked to her why she would sign

cheques twice. She replied that she was not confident of her signature

and therefore on the advice of her husband she would sign twice on

the cheque. The version of Reuben Solomon is that the cheque was

signed in the presence of his agent once, when in fact a perusal of the

dishonoured cheque shows that it was signed by her twice. It appears

to this Court that these issues ought not to be decided at the stage of

charge as evidence would have to be led to determine the truth of

either of these rival contentions. The unanswered questions emerging

from a perusal of the record at this stage cannot result in the accused

being discharged. The appropriate course would be for the trial court

to postpone answering the questions to the stage after the conclusion

of evidence. In the considered view of this Court, the materials on

record at this stage are sufficient to draw a strong suspicion against

the respondent for commission of the offence and therefore the case

should proceed against him by framing charges for the offences as

stated in the complaint.

18. Accordingly, the impugned order dated 8th May 2008 passed by

the learned MM is hereby set aside. It is held that the case of grave

suspicion is made out against Mukesh Gupta for the offence under

Sections 380, 464, 467, 471 read with 34 IPC. The matter will now be

placed before the learned MM for framing of charges. In the light of

the order passed by this Court on 21st February 2008 in Crl.MC. No.

3033/2004 and 4122 of 2005 it is requested that the trial court should

make every endeavour to conclude the trial and pass final orders in the

case arising out of FIR No. 522/2003 within a period of one year and

in any event not later than 31st July 2010.

19. The petition stands allowed and disposed of in the above terms.

The trial court record be returned forthwith together with a certified

copy of this order. The case will now be listed before the concerned

trial court on 3rd August 2009 for further proceedings. The stay

granted by the order dated 31st July 2008 by this Court stands vacated

and the application stands disposed of.

S.MURALIDHAR, J July 6, 2009 ak