Delhi District Court
M/S. Garg Son vs State (Nct Of Delhi) on 16 November, 2015
Criminal Appeal No.40/15
IN THE COURT OF SH. PULASTYA PRAMACHALA
ADDITIONAL SESSIONS JUDGE
SHAHDARA DISTRICT, KARKARDOOMA COURTS, DELHI
Criminal Appeal No. : 40/2015
Under Section : 138 NI Act
Police Station : Preet Vihar
CC No. : 52/2014
Unique I.D. No. : 02402R0343912015
In the matter of :-
M/s. GARG SON
Through Sh. Arun Garg,
Proprietor :-
At : F-35, Jagatpuri, Gali No.10,
Parwana Road, Delhi-110051.
..............Appellant
VERSUS
1. STATE (NCT OF DELHI)
2. M/s. SYDNEY SPA'S
Through its partner Sh. Nikhil Gulati,
At : F-159 & 66, Jagatpuri, Delhi-110051.
..............Respondents
Date of Institution : 29.09.2015
Date of receiving the case in this court : 30.09.2015
Date of reserving order : 02.11.2015
Date of pronouncement : 16.11.2015
Decision : Appeal is partly allowed.
JUDGMENT
1. This is an appeal preferred against the judgment of conviction dated 07.09.2015 and order on sentence dated 09.09.2015, passed by trial court in a case titled as M/s. Sydney SPA's v. M/s. Garg Son, bearing CC No.52/2014, under Section 138 NI Act. Vide impugned judgment of conviction, the trial court convicted appellant Page 1 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15 herein for offence punishable under Section 138 NI Act. Vide impugned order on sentence, the trial court sentenced convict (appellant herein) to rigorous imprisonment for the period of one year and to pay a fine of twice the cheque amount to be paid to the complainant (respondent no.2 herein) as compensation and in default of payment of fine, convict was directed to serve simple imprisonment for six months.
2. Briefly stated, the relevant facts giving rise to this appeal are that appellant was supplied certain Sanitary articles by respondent no. 2/complainant for the value of 3.12 lac. Appellant issued a cheque bearing no.550461 dated 28.08.2012 towards payment of that amount, however, same was not encashed during its presentation. Later on, appellant issued another cheque i.e. cheque in question for same amount, towards payment of aforesaid purchase. On its first presentation, this cheque was also dishonoured on account of insufficient funds in the account of appellant. Thereafter, respondent no.2 again consulted appellant and presented the cheque for second time for encashment and this time it was dishonoured on account of stopped payment. Respondent no.2 served a legal notice dated 18.03.2013 upon the appellant, however, despite service of the notice, appellant did not pay the cheque amount. Hence, complaint was filed by respondent no.2 against appellant for offence under Section 138 NI Act.
3. Trial court summoned the appellant and framed notice under Section 251 Cr.P.C. Appellant pleaded not guilty and claimed trial. Both parties led their evidence and the trial concluded in the judgment of conviction.
4. Being aggrieved of the impugned judgment of conviction and order Page 2 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15 on sentence, appellant has preferred this appeal on the following grounds :-
● The trial court did not appreciate that respondent no.2 had supplied the defective goods to the appellant and despite several requests and reminders respondents no.2 did not replace the defective goods and such goods were useless for the appellant, as due to defective in nature he could not sell them to his customers. ● The trial court did not appreciate the fact that the respondent no.2 intentionally and deliberately filed a false and frivolous complaint case, on the basis of wrong facts against the appellant only in order to pressurize the appellant and to extort the hard earned money from the appellant.
● The trial court did not appreciate that the cheque in question was given for security purpose, but since the respondent had delivered the defective goods to the appellant, which the respondent did not take back despite request, therefore, the appellant was under no obligation to honor the impugned cheque in question. ● The trial court did not consider that no document was placed on record by respondent no.2 before the trial court to prove admitted liability of the appellant as alleged by the respondent no.2, nor a single witness was produced by the respondent no.2 to prove his case.
● The trial court did not appreciate that there were no other civil or criminal involvements reported against the appellant, therefore, a lenient view should have been taken against the appellant and he might be acquitted in this case.
● Ld. counsel for appellant referred to the judgment passed by Supreme Court in Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd.Page 3 of 12 (Pulastya Pramachala)
Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15 & Anr. to submit that the application filed by the accused under Section 147 of N.I. Act was liable to be accepted and the accused should not have been punished, if he was willing to pay the cheque amount along with 10% of cheque amount to be deposited before the legal services authorities. He further submitted that the trial court did not appreciate that the complainant/respondent no.2 had made self contradictory statements and such contradictions in his statement did not prove his case.
FINDINGS :-
5. First of all I shall deal with the contentions raised on behalf of appellant that the appellant had moved an application under Section 147 NI Act for compounding of the case, which was wrongly dismissed by the trial court. Ld. counsel for appellant referred to judgment passed by Supreme Court in the case of Damodar S. Prabhu v. Sayed Babalal, (2010) 5 SCC 663, to submit that even in the absence of consent of the complainant/ respondent, the trial court was under duty to accept the application of the appellant and to compound the offence. Ld. counsel referred to the guidelines framed by Supreme Court in aforesaid judgment as laid down in paragraph 21 (i) (b). It was stated in these guidelines that if the accused did not make an application for compounding at the first or second hearing of the case, then if an application for compounding was made before the Magistrate at a subsequent stage, compounding could be allowed subject to condition that the accused would be required to pay 10% of the cheque amount to be deposited as a condition for compounding, with the legal services authority or such authority as the court deemed it fit. Ld. counsel submitted that there is no mention of Page 4 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15 taking consent from the complainant for the purpose of compounding the offence, either in Section 147 NI Act or in the aforesaid guidelines framed by Supreme Court. Therefore, even in absence of the consent of the complainant trial court should have compounded the offence, instead of passing a judgment of conviction. He further submitted that the compounding can be done by this Court as well, therefore, the offence in question should be compounded as the appellant is ready to make payment of the cheque amount with interest.
6. On the other hand, ld. counsel for respondent challenged such contentions of appellant and submitted that without consent of the complainant, offence cannot be compounded, therefore, the trial court had rightly rejected the application of the complainant.
7. Section 147 was inserted in NI Act by way of amendment in the year 2002, to make the offence compoundable. While framing the guidelines for compounding of the offence, Supreme Court in the case of Damodar S. Prabhu (supra) observed that "Section 147 of the Negotiable Instruments Act, 1881 is in the nature of an enabling provision, which provides for the compounding of offences prescribed under the same Act, thereby serving as an exception to the general rule incorporated in sub-Section (9) of Section 320 Cr.P.C. which states that "No offence shall be compounded except as provided by this Section" A bare reading of this provision would lead us to the inference that offences punishable under laws other than the Penal Code also cannot be compounded. However, since Section 147 was inserted by way of an amendment to a special law, the same will override the effect of Section 320 (9) Cr.P.C especially keeping in mind that Section 147 Page 5 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15 Carries a non obstante clause."
8. Supreme Court no where stated in this judgment that the compounding could be done without consent of the complainant. Rather, in para 18 of the same judgment, it was further observed by the Court that "It is quite obvious that with respect to the offence of dishonor of cheques, it is the compensatory aspect of the remedy, which should be given priority over the punitive aspect." Thus, the Supreme Court was more concerned with the compensatory aspect of the remedy so as to promote the compounding and the Court had refused to read the bar created by Section 320 of Cr.P.C in compounding of an offence under other Act than IPC.
9. Similar question was raised before High Court of Delhi in the case of J.L.G Retails Ltd. v. Abhishek Mehra, Crl.M.C. No.2804/2013 and Crl.M.A. No.10705/2013 decided on 22.07.2013. In that case also the complainant had not agreed to compound the offence under Section 138 N.I. Act and Delhi High Court had refused to compound the offence under Section 147 of the Act. This judgment of High Court of Delhi was approved by a three judges bench of Supreme Court in S.L.P (Crl.) No.281/2014 decided on 29.10.2014. The Supreme Court observed that compounding can be done only bilateral and not unilateral.
10. Thus, the law in respect of compounding of offence under Section 138 NI Act is well settled in the terms that it can be done at any stage of the proceedings, but at the same time consent of the complainant is an important factor for compounding of the offence. Therefore, I do not find any infirmity in the decision taken by trial court to reject such application of the appellant. Even before this Court, respondent no.2/complainant did not agree for Page 6 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15 compounding, therefore, the offence cannot be compounded.
11. Appellant has raised another relevant ground that respondent no.
2/complainant had supplied defective goods to him, which the respondent did not take back and therefore, he was not under obligation to honor the cheque in question. Ld. counsel for appellant submitted that the appellant had made several requests to respondent no.2/complainant to replace the defective goods as due to defect, appellant could not sell the same to his customers. However, respondent no.2/complainant did not replace the goods, therefore, appellant was under no liability to make payment of the amount of the cheque. At the same time, it was also argued that the cheque was given to respondent no.2/complainant towards security for supply of the goods and therefore, there was no liability at the time of presentation of this cheque.
12. On the other hand, ld. counsel for respondent no.2/complainant contested this plea by submitting that the cheque in question was in fact given towards sale price of the goods supplied to the appellant. He also submitted that appellant raised the plea of supply of defective goods as an after thought story and he did not make any kind of complaint with the respondent no.2 in respect of defect of any good. He also referred to a judgment passed by High Court of Delhi in Suresh Chander Goyal v. Amit Singhal, Crl.L.P. 706/2014 decided on 14.05.2015, to submit that the cheque allegedly given as security was presented against existing liability of the appellant and therefore, there is no force in the argument of appellant that such cheque was not towards any liability against appellant.
13. As far as plea of appellant that cheque in question was given Page 7 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15 towards security, is concerned, same is belied by the appellant himself because he admitted the prosecution evidence that certain sanitary products were delivered to him on 25.08.2012 having value of Rs.3.12 lac, against an order placed by him with respondent no.2/complainant. It is belied by his further admission of correctness of prosecution evidence that he issued the cheque in question in lieu of payment of previous cheque bearing no. 550461 dated 28.08.2012. Appellant himself averred in his affidavit that there was a dispute in respect of replacement of certain articles, which was compromised between him and complainant and thereafter, he had issued the cheque in question dated 24.11.2012 for the amount of Rs.3.12 lac. He added in his affidavit that it was given on the condition that it shall not be presented for encashment until the replacement of damaged materials was done by respondent no.2/complainant.
14. Therefore, it cannot be said that cheque in question i.e. cheque no.
132448 dated 24.11.2012 was issued by the appellant as security in advance for any transaction. It was rather issued by the appellant towards purchase of certain sanitary goods from the complainant.
15. Thus, the only plea of defence for appreciation of this Court is that whether appellant was justified in giving instructions to his banker to stop the payment of this cheque, on the grounds of defective materials being supplied to him by respondent no.2/complainant. In this respect during his cross-examination, appellant stated that he had come to know about defects in the goods after 3-4 days of the delivery. He further stated that he had conveyed the respondent regarding the defects. As per admitted case, the goods were Page 8 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15 delivered to the appellant on 25.08.2012, meaning thereby the appellant was aware of defective goods latest by 28 or 29.08.2012. It is also admitted fact that the appellant had given a cheque bearing no.550461 dated 28.08.2012, which was returned to him and thereafter, he had issued the fresh cheque i.e. cheque in question. Admittedly, appellant did not reply to the notice dated 18.03.2013, which was received by him. Appellant rather relied upon a letter dated 24.01.2013, which was allegedly sent through post to respondent no.2/complainant.
16. The defence of the appellant was to be established by the appellant that he was under no liability to make payment of Rs.3.12 lac to the respondent no.2/complainant. Mere bald statement made before the Court at a later stage, cannot be sufficient to discharge the presumption under Section 118 and 139 NI Act. The conduct of the appellant in issuing a fresh cheque in the same amount, after an alleged compromise with the respondent no.2/complainant is not consistent with the normal course of action on the part of an aggrieved person with grievances of receiving defective materials. Unless it is established by way of some cogent evidence that the second cheque was also given with certain riders against encashment of the same, it cannot be presumed that there was no liability against appellant towards respondent no.2 for the sum of amount as mentioned in the cheque. It is also worth to appreciate that the amount of Rs.3.12 lac was mentioned in the both cheques, which were admittedly issued to respondent no.2 by the appellant. It was a meaningless exercise to issue a cheque with same amount, if there was some dispute relating to supply of defective goods. The appellant could have deducted the amount of the value Page 9 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15 of the defective goods, if his grievances, if any, were actually not satisfied by the respondent no.2. Furthermore, appellant himself went on to say in his cross-examination that at the time of issuing the cheque he was facing some issues with the funds and finances and he had informed the complainant about the same. Such statement of appellant supports the contentions of respondent no.2 that appellant had been buying time to make payment of cheque amount or in other words to make arrangement of the sufficient amount in his account for encashment of the cheque. Interestingly, appellant did not confront respondent no.2 in his cross-examination with the alleged letter dated 24.01.2013 during his cross- examination. Therefore, it cannot be assumed that this letter was actually sent by the appellant to respondent no.2. The legal notice was admittedly served upon appellant at a later stage and even at that time he did not raise the issue of supply of defective goods. In these circumstances, I do find that the trial court rightly rejected the contentions of appellant, which were put by him as his defence and as an excuse for not honoring the cheque in question. Therefore, I do not find any infirmity with the decision taken by the trial court to convict the appellant for offence punishable under Section 138 NI Act.
17. In respect of sentence, ld. counsel for appellant sought lenient approach and he referred to a judgment passed by Supreme Court in Kaushalya Devi Massand v. Roopkishore Khore, (2011) 3 SCR 879. In this case, it was observed by the Supreme Court that gravity of an offence under Section 138 of the Act cannot be equated with an offence under provisions of IPC or other criminal offences. The court sustained the decision taken by Magistrate to Page 10 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15 let off the convict with a punishment of imposition of fine only, which was payable as compensation to the complainant.
18. In the present case, it is borne out from the record that the appellant had agreed to make the payment of cheque amount before the trial court and had sought compounding of the offence. It was not allowed because the respondent no.2/complainant did not agree for the same. Even before this Court, appellant had prayed for compounding of the offence stating that he was willing to make payment of cheque amount with interest. Both parties were asked to look for settlement, but due to difference in the amount expected by the respondent no.2 and amount agreed to be paid by the appellant, settlement could not take place. The trial court has already passed an order of imposing fine of twice of the cheque amount, to be paid to the respondent no.2/complainant as compensation and has directed that in default of payment of fine the appellant shall serve simple imprisonment for six months. Keeping in view all these circumstances, I find that the appellant can be punished for the delay occasioned by him in making payment of the due amount to the respondent no.2/complainant, by sustaining the order of fine as imposed by the trial court. In fact, the twice amount of Rs.3.12 lac in the span of three years from the date of issue of the cheque, is quite handsome amount for the respondent to be compensated for all the losses and sufferings. Such punishment also includes deterrent effect against the appellant, in the form of extra financial burden. Therefore, the sentence of rigorous imprisonment for one year would be excessive, in addition to the exemplary penalty awarded to the appellant.
Page 11 of 12 (Pulastya Pramachala)Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.40/15
19. Hence, conviction of the appellant is maintained for offence under Section 138 NI Act. Appeal is partly allowed in respect of sentence and it is directed that the appellant shall pay a fine of Rs.6.24 lac to the respondent no.2/complainant within a period of one month from today. Sentence of rigorous imprisonment for one year is set aside. The fixed deposit furnished by appellant before this Court shall be released to the respondent no.2/complainant after making an endorsement in favour of the respondent no.2/complainant. The appellant shall be entitled to set off the maturity value of this fixed deposit as on this date, against total amount of fine to be deposited by him. The remaining part of fine shall be deposited in the trial court up to 16.12.2015. In any case, appellant shall surrender before the trial court on 16.12.2015, if he fails to deposit the remaining amount of fine so as to suffer the sentence of simple imprisonment for three months in default of payment of remaining part of fine.
20. Copy of this judgment be sent to the trial court with TCR.
File be consigned to record room, as per rules.
Announced in the open court (PULASTYA PRAMACHALA) today on 16.11.2015 Additional Sessions Judge (Shahdara) (This order contains 12 pages) Karkardooma Courts, Delhi Page 12 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi