Delhi District Court
Dinesh Kumar vs . Kailash Jhanwar on 7 July, 2023
IN THE COURT OF SHRI YASHDEEP CHAHAL
Metropolitan Magistrate01 : New Delhi District : PHC : New Delhi.
Complaint Case No.55738/2016
Dinesh Kumar Vs. Kailash Jhanwar
P.S. Connaught Place
ID number of the case : New No.55738/2016
DLND020131482016
Date of commission of offence : 08.04.2015.
Date of institution of the case : 22.09.2015.
Name of the complainant : Dinesh Kumar,
S/o Shri Champa Lal,
Proprietor of M/s. Rawat Mal &
Company, Having Its Office At
X3531A, Gali No. 2, Shanti Mohalla,
Gandhi Nagar, Delhi110031.
Name of accused and address : (1) Kailash Jhanwar @ K. Jhanwar,
AR/Proprietor of M/s. Flowery
Fashion, 1016, First Floor, Gopi
Market, Ring Road, Surat395002,
Gujrat.
&
(2) M/s. Flowery Fashion, 1016, First
Floor, Gopi Market, Ring Road,
Surat395002, Gujrat.
Offence Charged : Under Section : 138 of the
Negotiable Instruments Act.
Offence Complained of : Under Section : 138 of the Negotiable
Or Proved Instruments Act.
Plea of the accused : Pleaded not guilty
Final order : Convicted
Date of judgment : 07.07.2023.
Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 1
JUDGMENT
BRIEF STATEMENT OF FACTS FOR THE DECISION:
1. By this Judgment, I shall disposeof the present complaint filed by the complainant under Section 138 NI Act.
2. It is stated in the complaint that the parties had entered into an arrangement for supply of finished goods in the form of Readymade Garments/Ladies Pants. As per the arrangement, raw cloth was supplied by the accused and the complainant's job was to manufacture Readymade Garments/Pants and supply them to the accused. The consideration for carrying out this work was agreed between the parties. The payments in respect of the bills/invoices raised by the complainant was to be made within 30 days of the receipt of invoice failing which an interest @ 24% per annum was payable for the delayed period. In the affidavit of evidence, it is deposed by CW1/complainant that from 25.01.2015 to 15.04.2015, complainant had supplied a total of 1983 pieces of garments to the accused in seven separate consignments. Separate invoices were also issued and the same are collectively (running into seven pages) exhibited as Ex. CW1/1. It is further deposed by CW1 that the complainant had also to bear various additional costs on packaging, delivery etc. It is further deposed that later the complainant completed the remaining work also and prepared about one thousand garments. However, the said garments were not collected by the accused from the Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 2 complainant. Thereafter, the complainant also supplied four debit notes of Rs.3,14,425/ to the accused for the undelivered order which was also inclusive of designing charges, sample charges etc. Thus, the total liability of the accused amounted to a sum of Rs.7,006,45/. It is further deposed that agaiinst the said liability, the accused had paid a sum of Rs.50,000/ and another sum of Rs.21,000/ as part payment of the total liability.
3. The controversy began when the accused persons issued and handed over five cheques bearing Nos. (i) 795990 dated 08.04.2015 for Rs.34,780/, (ii) 795991 dated 08.04.2015 for Rs.49,308/, (iii) 785992 dated 10.04.2015 for Rs.35,912/, (iv) 795993 dated 10.04.2015 for Rs.33,300/ and (v) 795994 dated 10.04.2015 for Rs.22,500/, all drawn on Punjab National Bank, Ring Road, Surat, Gujrat.
4. The case of the complainant is that upon presentation, within the statutory period, the said cheques were returned back as dishonoured. The return memos Ex. C1/8 to Ex. C1/12 state the reason of dishonour to be 'Funds Insufficient'. CW1 further deposed that thereafter, two more cheques were also issued by the accused. However, I may note that the said two cheques are not a part of the present complaint. The return memos bear the date of 04.07.2015. Thereafter, the complainant issued a common legal notice of demand dated 02.08.2015. The notice was returned back as 'refused' which is mentioned on the back of the envelope and bears date 07.08.2015. The notice along with original Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 3 postal receipts, courier receipts and returned envelopes with remarks 'refused' are Ex. CW1/13 (collectively). Despite lapse of 15 days from the date of receipt of notice, no payment was made by the accused. This complaint was filed within the statutory period.
5. Upon summoning the accused, notice under Section 251 Cr.PC was framed on 26.09.2018, wherein the accused took a plea of defence that he had no liability towards the complainant as the complainant never delivered the finished products to the accused. He further stated that the fabric supplied by him was still lying with the complainant and the same was of a value of Rs.67 Lacs. At the time of notice, the accused admitted his signatures on the cheques, however, he stated that other details in the cheques were not filled up by him. It is crucial to note that the accused denied that he had received any legal notice of demand from the complainant.
6. During the stage of trial, the complainant adopted his pre summoning evidence. The bank receipts, return memos and statement of accounts pertaining to the complainant's proprietorship was proved by examining CW2 Suman Pushkar from Allahabad Bank. Since, the complainant adopted the presummoning evidence in toto, the same is not being reiterated in the interest of brevity. Thereafter, the matter was fixed for crossexamination of CW1, which was conducted on 03.08.2019. During crossexamination CW1 deposed that he was the proprietor of M/s. Rawat Mal & Company. He further deposed that his proprietorship Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 4 concern is not registered. He further deposed that he did not maintain any accounts as he was running a small business. He denied the suggestion that he did not maintain accounts as the accused had no liability towards him. He further deposed that he did not have any written purchase order from the accused as the accused used to give orders over telephone. He denied the suggestion that the accused would not be liable for anything as there was no purchase order on record. He further deposed that he has not placed on record any delivery report regarding supply of goods/materials to the accused. However, he clarified that the accused used to send his employees for taking delivery of the goods and he used to send bills/invoices to the accused through post which were duly signed by the accused and sent back to him. During further crossexamination, CW1 denied the suggestions with respect to the exhibits being forged, with respect to the cheques being security cheques and misuse thereof and with respect to non receipt of legal notice.
7. Upon the conclusion of complainant's evidence, statement of the accused under Section 313 Cr.PC was recorded wherein he stated that the complainant has not supplied any finished material to him and has misappropriated the advanced money taken from him. He further stated that even in his complaint, the complainant has not mentioned the mode and manner in which finished products were delivered to him. He further stated that the invoices were fabricated. He further stated that the cheques were given by him as advance security cheques and the same were not meant to be presented for honour as the finished goods were not Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 5 supplied to him and he had no liability to make any payment to the complainant. He further stated that he never received any legal notice as a landmark of his address i.e Near Shiv Shakti Sweets was not mentioned in his address.
8. The accused was granted an opportunity to lead defence evidence in the matter. However, despite multiple opportunities from 21.08.2019 to 06.03.2023, no steps were taken by the accused to lead evidence in defence and accordingly, the right came to be closed vide order dated 06.03.2023. Thereafter, final arguments were heard from both sides.
9. Ld. Counsel for the complainant submitted that the invoices Ex. CW1/1 bear stamp of the proprietorship of the accused along with a receiving, thereby meaning that finished material was supplied to the accused as per the agreement. He further submitted that the complainant has a presumption in his favour and the accused has failed to rebut the same.
10. Per contra, Ld. Counsel for the accused submitted that the complainant has failed to prove that the accused had placed any orders for manufacturing garments. It is further submitted that the complainant has also failed to prove delivery of the finished products.
Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 6
11. Ld. Counsel also referred to the debit notes issued by the complainant for Rs.3.14 Lacs and submitted that there was no occasion for issuing the debit note. He further submitted that the complainant has failed to exhibit the requisite certificate under Section 65B of the Indian Evidence Act along with the computer generated postal receipts.
12. I have given a careful consideration to the evidence on record as well as to the arguments advanced by Ld. Counsels for both the parties. I may now proceed with the examination of evidence on record
13. Before proceeding, I may reproduce Section 138 NI Act for ready reference: --
Section 138 in The Negotiable Instruments Act, 1881.
138 Dishonour of cheque for insufficiency, etc., of funds in the account. -- Where any cheque drawn by a person on an account maintained by him 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: Provided that nothing contained in this section shall apply unless --
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes 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 ] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 7
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.-- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
14. The conditions essential for proving the offence under Section 138 NI Act may be listed as follows: --
(i) Cheque drawn by a person on an account maintained by him for a payment of money to another person.
(ii) The payment must be for the discharge of any debt or other liability.
(iii) The cheque must be returned by the bank as 'unpaid'.
(iv) The cheque must be presented to the bank within a period of three months from the date on which it is drawn.
(v) Upon dishonour, a demand for payment must be made by the payee by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of information of dishonour.
(vi) The drawer of cheque fails to make the payment within 15 days of the receipt of the notice.
15. In addition to the ingredients mentioned in Section 138, Section 139 provides a presumption in favour of the holder of cheque to the effect that the cheque received by him was received for the discharge of any debt or other liability. In other words, the complainant has a Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 8 statutory presumption in his favour and it is not specifically required to be proved that the cheque was issued to him for the discharge of any debt or liability. No doubt, the said presumption is a rebuttable presumption and the accused ought to be granted an opportunity to rebut the same during the trial. Moreover, the presumption is rebuttable on a preponderance of probabilities. The standard of proof in proving a defence by the accused is fairly certain in light of various judicial pronouncements.
16. In this case, the cheques in question were issued on 08.04.2015 & 10.04.2015 and were presented for payment within three months. The return memo Ex. CW1/8 indicates that the cheques were presented within the prescribed period. Thereafter, legal notice of demand was sent within a period of 30 days and the same is also duly exhibited along with postal receipts and envelope bearing the endorsement of 'refusal'. Furthermore, it is also the admitted position that the accused did not make the payment within 15 days of the receipt of notice. The contentious issue that emerge for the consideration of this Court is whether the cheques were presented for the discharge of a legally enforceable debt.
17. The statutory timelines for the culmination of offence under Section 138 NI Act are satisfied. There is no dispute with respect to the time periods. The specific dispute pertains to whether the complainant had delivered any finished products to the accused and the cheques were Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 9 presented for discharge of liability in that regard. It is the case of the complainant that almost 1983 articles were supplied and delivered to the accused. Additionally, a lot of 1000 articles was manufactured by the complainant, however, the same was not delivered owing to the failure of the accused to make payment for the previous lots. The complainant has placed on record invoices, pertining to the period from 25.01.2015 to 15.04.2015. The invoices bear the stamp and endorsement of M/s. Flowery Fashion (proprietorship concern of the accused). The stamp reads as 'FLOWERY FASHION, 1016, GOPI MARKET, RING ROAD, SURAT2', which is the address of the accused as per the memo of parties. The invoices record the particulars of the lots of finished products which were prepared by the complainant along with the amonts indicated against them. The invoices indicate that the complainant had manufactured finished products and sent the invoices to the accused for payment. The stamp on the invoices has not been disputed during the trial. It follows that the invoices were duly received and aknowledged by the accused. CW1 has categorically deposed that as per the arrangement, the finished goods were manufactured and supplied to the accused from time to time and thereafter, invoices were raised for payment. Notably, the said statement has not been rebutted by the accused in cross examination.
18. It may also be noted that the dates mentioned on the invoices precede the dates on the cheques thereby meaning that the cheques were presented for payment after non payment upon receipt of the invoices.
Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 10 The amounts mentioned on the invoices are the same as the amounts mentioned in the cheques.
19. So far as the issuance of debit note is concerned, the same has no bearing on this case as even as per the liability indicated by the invoices, the accused was liable to pay an amount of Rs.3,84,399/ and the cheques were presented for payment of an amount lesser than the said liabilty. Even after adjusting the part payments of Rs.50,000/ and Rs.21,000/ earlier made by the accused, the outstanding liability comes to be more than the collective amount of the cheques in question. It may be noted that in addition to the statutory presumption in his favour, the complainant has placed on record hard evidence in the form of invoices duly acknowledged by the accused. Despite an elaborate cross examination, the accused has failed to put a dent in the story of the complainant. Notably, the absence of any delivery report or any purchase order may not advance the case of the accused as the invoices were issued and acknowledged by the accused. It stands to reason that the invoices were issued after preparation of finished products and acknowlegement by the accused is consistent with the story of the complainant. As regards the purchase orders, it is submitted by the accused that no purchase order was placed by him. However, since, it is admitted that the cheques in question were signed and issued by the accused, it cannot be accepted that the same were issued for any purpose other than the placement of purchase orders. In the entire evidence, the accused has not mentioned any other purpose for which the cheques were Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 11 issued by him. It is essential to note that the burden to displace the statutory presumption under Section 139 of NI Act fell upon the accused.
20. Ld. Counsel for the accused has referred to a decision of Hon'ble High Court of Delhi in 'Deepshikha Kumari Vs. Leela Infrastructure & Mining Pvt. Ltd., Crl. M.C. No. 2348/2011, to advance the proposition that the presumption under Section 139 NI Act could only be given when sufficient facts exists for such presumption. Upon a perusal of the judgment, I am of the opinion that it fails to advance the case of the accused. The necessary requirements for drawing statutory presumption are duly satisfied and the accused has failed to rebut the same.
21. So far as the contention of non receipt of legal notice is concerned, the same is liable to be rejected. For, the envelope on record reveals that the notice was returned back as refused. It is not the case of the accused that his address was incorrect. The only ground taken by the accused is that a landmark near his address was not mentioned on the envelope. At the outset, the ground is rejected as otherwise, the address was complete and the envelope was returned as refused. The law is fairly settled that if a legal notice is sent on complete address of the accused, the same is deemed to be served if sent through proper channel. In that regard, the receipts are on record. So far as the certificate under Section 65B is concerned, the contention taken by the accused is to reject the computer generated postal receipt. Be it noted that apart from the Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 12 computer generated receipt, there are courier receipts also on record which are duly admissible. Moreover, as noted above, the legal notice was served and was refused by the accused. In view of the same, the contention regarding postal receipt shall make no difference.
22. In light of the testimony of CW1, crossexamination conducted on behalf of the accused and documents on record, I am of the considered opinion that the complainant has proved his case against the accused beyond reasonable doubt. In view of the aforesaid analysis, I am of the opinion that the accused has failed to discharge his burden and has not been able to rebut the presumption in favour of the complainant. On a broad analysis of the case, I see a consistent story which has not been rebutted on the basis of legally admissible evidence, and which inspires the confidence of the Court. I may note that minor contradictions, inconsistencies, exaggerations or embellishments could not constitute a credible foundation for rejecting an otherwise coherent case set up by the complainant.
23. Accordingly, I hold the accused guilty for commission of offence punishable under Section 138 of the NI Act and is convicted thereunder.
24. Let the accused be heard on the point of sentence.
YASHDEEP Digitally signed by
YASHDEEP CHAHAL
CHAHAL Date: 2023.07.07 16:06:55
+0530
Announced in the Open Court (YASHDEEP CHAHAL)
On 7th July, 2023. M.M.01 : Patiala House Courts
New Delhi District
New Delhi.
Complaint Case No.55738/2016 Dinesh Kumar Vs. Kailash Jhanwar 13