Delhi District Court
Hitaishi Publisher Pvt Ltd vs Anubhav Singhal on 28 March, 2024
IN THE COURT OF MS. DIVYA GUPTA, MM-05
(NI ACT)/ CENTRAL/THC/DELHI
In case of:-
Hitaishi Publisher Pvt. Ltd.
Through its Director
Sh. Naresh Kumar
Office at 11, Ansari Road,
Darya Ganj, New Delhi ...... Complainant
Versus
Sh. Anubhav Singhal
S/o Sh. Anil Kumar Singhal
R/o H. No. 27/12B, Ashok Nagar,
Civil Line, Kiraoli,
Agra, U.P. ......Accused
JUDGMENT
a) Sl. No. of the case : 16313/2018
b) CNR no. : DLCT02-027965-2018
c) Date of institution of the case: 05.09.2018
d) Offence complained of : 138 NI Act
e) Plea of the accused : Pleaded not guilty
f) Arguments heard on : 12.02.2024
g) Final order : Acquitted
h) Date of Judgment : 28.03.2024
CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 1/19
BRIEF STATEMENT OF REASONS FOR DECISION OF THE CASE:-
FACTUAL MATRIX-
1. This is a complaint case filed under Section 138 of Negotiable Instrument Act, 1881 (hereinafter referred to as "NI Act") by Hitaishi Publisher Pvt. Ltd. through its Director namely Sh. Naresh Kumar (complainant) against Sh. Anubhav Singhal (accused) in respect of one cheque bearing no. 304529 dated 06/07/2017, amounting to Rs. 2, 50,000/-, drawn on Punjab National Bank, Kamala Nagar, Agra UP (hereinafter called "the cheque in question"). The facts of the case, as alleged by the complainant, are as follows:
a. That at the request of the accused, the accused had been appointed by the company of the complainant as a sales executive cum salesman to promote the business of the company on 01/08/2015. Further that at the time of appointment the accused had executed three years' service bond on 11/08/2016. Further that the accused started working with the company w.e.f. May, 2015 and Complainant Company started making the payment of the expenses incurred such as Auto, TA, DA, etc. for the promotion of the company of the complainant. However, the accused left the job in November, 2016 without any intimation and resignation and thereafter, Complainant Company came to know that accused never visited the respective dealers CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 2/19 for the purpose of promotion of the complainant company and thereby dishonestly received the salary cum expenses from the complainant company. Further that as per the ledger account of the complainant, the accused had received a sum of Rs. 53,300/- from the complainant company in cash in lieu of TA and DA and further amount of Rs. 2, 30,395/- with respect to specimen books. In addition to the above accused was also liable to pay a sum of Rs. 1 lakh as damages to the complainant company due to breach of bond and in total accused is liable to pay total Rs. 2,94,894/-. Further that complainant company had served legal demand notice on 27/03/2017 to the accused to pay the aforesaid liability of Rs. 2, 94,894/- alongwith 18% interest per annum. Consequently, complainant company and accused had settled the matter and accused had agreed to pay the sum of Rs. 2, 50,000/- as full and final settlement and thereby the accused issued the cheque in question for Rs. 2, 50,000/- to the complainant company and same was dishonoured on presentation for reason "return unpaid as payment stopped" via return memo dated 10/07/2017.
b. Further that legal demand notice dated 13/07/2017 was sent to the accused through registered AD and speed post. That despite due CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 3/19 service of notice, the accused failed to make the payment and hence, the present complaint.
PROCEEDINGS BEFORE THE COURT-
2. Pre-summoning evidence was led by the complainant. On prima facie case being made out against the accused, cognizance was taken and accused was summoned for an offence punishable under Section 138 of the Act.
3. Accused entered appearance. The particulars of the offence and substance of accusation as per provisions of Section 251 Cr.P.C. was explained to accused on 21/10/2021 to which accused pleaded not guilty and claimed trial. The accused admitted his signatures on the cheque in question but denied filling any other particulars on the cheque. Accused denied receiving of legal demand notice and stated that the address mentioned on the legal demand notice is incorrect. Further in his defence recorded on the same day, accused stated "I handed over two cheques to the complainant on the day when I joined the company. One of the cheque was of the blank cheque and the other one cheque was for account verification. I filled the amount of Rs. 300/-. I was offered a salary of Rs. 18,000/- but I never received the full salary. I was sent to Chhattisgarh for the company work. On not receiving full salary, I resigned from the company. Thereafter, the complainant misused the blank cheque which was given by me on joining."
CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 4/19
4. Thereafter, complainant led his evidence and adopted his pre-summoning evidence by way of an affidavit in post summoning evidence which is Ex. CW1/A. He relied upon the following documents: -
Ex. CW1/1: Copy of Memorandum/registration certificate Ex. CW1/2: copy of resolution dated 17/09/2015 Ex. CW1/3: copy of indemnity bond Ex. CW1/4: copy of account statement Ex. CW1/4A: certificate U/s 65B Ex. CW1/5: copy of legal notice dated 27/03/2017 Ex. CW1/6: postal receipt Ex. CW1/7: original cheque no. 304529 Ex. CW1/8: return memo dated 10/07/2017 Ex. CW1/9: legal notice dated 13/07/2017 Ex. CW1/10: postal receipt Ex. CW1/11: tracking report The CW1 in his affidavit reiterated the contents of the complaint. Thereafter CW1 was cross-examined by the Ld. Counsel for the accused on 18.01.2023. After the cross- examination, CW1 was discharged and CE was closed on 18.01.2023.
5. Thereafter, statement of accused was recorded under Section 313 Cr.P.C. on 22/02/2023 where all the incriminating evidence was put to the accused. The accused admitted his signatures on the cheque but denied filling any other particulars on the cheque. He stated that address on the legal notice is incorrect and that his correct address was 27/128, Ashok Nagar, Civil Lines, Kirawali Agra in 2017. He reiterated the defence stating that "I had executed the bond Ex. CW1/3. However, I had left the job CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 5/19 after intimating Mr. Amit Garg who was the Director of the complainant. At the time of joining I had given the cheque in question as security along with another cheque of Rs. 200/- for account verification. I am not liable to pay the cheque amount to the complainant." He denied any liability towards the complainant. Accused did not wish to lead DE and matter was fixed for final arguments.
6. Final arguments were advanced by both the parties. I have heard counsel for both the parties, perused the record and have gone through the relevant provisions of the law.
INGREDIENTS OF THE OFFENCE AND DISCUSSION-
7. At this stage, it would be apposite to discuss the relevant provisions of law in order to ascertain the legal standard required to be met by both the parties. In order to establish an offence under Section 138 of Negotiable Instrument Act, the complainant must prove the following ingredients:-
First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 6/19 Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
8. In the present case, the issuance of the cheque in question is not denied and the accused has admitted his signatures on the cheque. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn in favour of the complainant, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. This provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 7/19
9. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
10.Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarize the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 8/19 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence.
Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
11.Section 139 NI Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. The reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139 NI Act, the standard of proof for doing so is that of 'preponderance of probabilities'.
CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 9/19
12. As discussed herein above, under Section 139 NI Act strong rebuttable presumptions in favor of the complainant arises but same can be rebutted by the accused by way of credible defence.
DEFENCE RAISED BY THE ACCUSED:-
13.In the present matter the accused has taken following defence:-
a. That accused did not receive any legal demand notice dated 13.07.2017.
b. That there was no legally recoverable debt/liability against accused on the date of presentment of cheque in question.
COURT'S OBSERVATION:-
WITH RESPECT TO FIRST DEFENCE-
14.It is trite law that while deciding a complaint U/s 138 NI Act, the Court has to firstly see whether the Complainant has successfully established the ingredients constituting the offence under the said section. Once these ingredients are established by the complainant and the accused admits the issuance of the cheque/his signatures, the presumption U/s 118 (a) and 139 of the NI Act arise.
15.One of the key ingredients to attract the liability of the accused under section 138 NI Act is that the "payee or holder in due course of the cheque makes a demand for the payment of said amount of money by giving a notice in CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 10/19 writing, to the drawer of the cheque". It is trite law that when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issuance of notice in terms of clause (b) of proviso to Section 138 of the NI Act stands complied with. At this juncture, reliance is placed upon the judgment passed by Hon'ble Supreme Court in the case of C. C. Alavi Haji vs. Palapetty Muhammed, 2007 (6) SCC 555 wherein it has been held that:
"15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the Court to draw presumption or inference either under Section 27 of the G.C. Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is needless to emphasise that the complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque. It is well settled that at the time of taking cognizance of the complaint under Section 138 of the Act, the Court is required to CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 11/19 be prima facie satisfied that a case under the said Section is made out and the aforenoted mandatory statutory procedural requirements have been complied with. It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In our opinion, this interpretation of the provision would effectuate the object and purpose for which proviso to Section 138 was enacted, namely, to avoid unnecessary hardship to an honest drawer of a cheque and to provide him an opportunity to make amends."
16.Further, the Hon'ble High Court of Delhi in R.L. Varma & Sons vs. PC Sharma, 2019 SCC Online Del 8964, has observed as follows:
"22.Legal presumption of service of notice can only arise in case the notice is correctly addressed. If the notice is incorrectly addressed no legal presumption can arise..."
"24. Section 138 of the Negotiable Instruments Act mandates the issuance of the statutory notice as a pre-condition to filing of a complaint. The cause of action to file a complaint under section 138 of the Negotiable Instruments Act arises CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 12/19 only on issuance and service of statutory notice and failure of the accused to comply with the statutory notice. In the absence of service of statutory notice the cause of action would not accrue. Service of statutory notice would also include legal presumption of service if circumstances so warrant."
"34. Since the pre-condition of filing a complaint under section 138 of the Negotiable Instruments Act of sending a statutory notice has not been satisfied in the present case, no cause of action arose in favour of the complainant to file the subject complaint. Since no cause of action arose, the petitioner could not have instituted the complaint nor could the trial court as well as the appellate court by the impugned order have convicted the petitioner."
17.Accordingly, if the legal demand notice bears the incorrect address of the Accused, no presumption under Section 27 of the General Clause Act, 1897 can be drawn and the requirement of sending a legal demand notice will stand unfulfilled.
18.In the present case, the accused at the stage of framing of notice under Section 251 Cr.P.C. as well as in his statement under Section 313 Cr.P.C. had submitted that he had not received the legal demand notice. He further stated that his address mentioned on the legal demand notice, Ex. CW1/9 is incorrect as the correct address was 27/128, Ashok Nagar, Civil Lines, Kirawali Agra CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 13/19 and not 27/12B. During the course of arguments, Ld. Counsel for complainant argued that the demand notice was sent on correct address and the accused in connivance with the postman returned the notice to the complainant back. Per contra, Ld. Counsel for accused argued that no notice was received by the accused as the same was sent on incorrect address. At the time of his statement under section 313 Cr.P.C. the accused has specifically stated that the correct tower number is 27/128 and not 27/12B.
19.Further during cross-examination of CW1, witness was confronted with document, Ex. CW1/3, which is copy of indemnity bond, where the address of the accused is different from the address mentioned on the complaint and legal demand notices (Ex. CW1/5 and Ex. CW1/9). It shows that the complainant was aware of the correct address of the accused which is mentioned on Ex. CW1/3, yet he failed to send the legal demand notice, Ex. CW1/9 on the correct address. Further tracking report of legal demand notice dated 13.07.2017, Ex. CW1/11, shows that the notice was not delivered and returned back to the sender.
20.Thus, it is evident from the above stated facts that the demand notice was sent on an incorrect address and the same was received back by the complainant. Further, the complainant has failed to lead any evidence to show the reasons for his belief that the house no. was 27/12B and not 27/128. Since, Section 138 NI Act is a technical CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 14/19 offence, all ingredients as mentioned above must be established for the accrual of cause of action in favour of the Complainant. In view of the above detailed discussion, the Complainant has failed to establish the essential ingredients of Section 138 of NI Act, hence no presumption under Section 139 is attracted in the present case.
WITH RESPECT TO SECOND DEFENCE:-
21.Further, accused has taken defence that there was no legally recoverable debt/liability against accused on the date of presentment of cheque in question. It is argued by the Ld. Counsel for accused that the complainant has failed prove that how the sum of Rs. 2, 94,894/- was legally recoverable from the accused. Further complainant has failed to prove that any settlement was arrived to full and final payment of RS. 2, 50,000/- and that there was no legally recoverable amount of Rs. 2, 50,000/- due against the accused as on the date of presentment of cheque and hence, he is liable to be acquitted solely on this ground itself. Accused has relied on the judgment of the Hon'ble Supreme Court in case titled as "Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel and Anrs. Crl. Appeal No. 1497/2022."
22.Per contra argued by the Ld. Counsel for complainant that complainant had paid sum of RS. 53,300/- towards TA and DA; Rs. 2, 30,395/- towards specimen books. Further in addition accused was liable to pay a sum of Rs. 1 lac as damages due to breach of bond and thus total liability of the accused was Rs. 3,83,695/-.
CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 15/19
23.As per the story of the complainant, total liability of accused due against the complainant was Rs. 3,83,695/- and thereafter complainant sent legal demand notice to the accused dated 27.03.2017 and both parties arrived at settlement and accused agreed to pay sum of Rs. 2,50,000/- as full and final settlement and issued the cheque in question to discharge the liability. However, perusal of legal demand notice dated 27.03.2017, which is Ex. CW1/5, shows that in the said legal notice, complainant demanded sum of Rs. 2,94,894/- instead of 3,83,695/-. Further complainant has failed to prove that the said legal demand notice dated 27.03.2017, Ex. CW1/5, was delivered upon the accused. No tracking report has been placed on record by the complainant showing the delivery of legal notice (Ex. CW1/5). Further the address mentioned on the said legal notice has been proved to be incorrect. It raises doubt on the credibility of the CW1. Further the contention of the complainant that after service of legal notice dated 27.03.2017, Ex. CW1/5, settlement was arrived between the accused and the complainant, in the absence of any proof showing delivery of the said legal notice, becomes doubtful and unbelievable.
24.In the landmark judgment Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel & Anr Criminal Appeal No. 1497 of 2022; October 11, 2022, the Hon'ble Supreme Court has held that for the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 16/19 maturity or presentation. Further held that, (i) for the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation;
(ii) If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque;
(iii) When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted;"
25.In Angu Parameswari Textiles (P) vs Sri Rajam & Co. decided on 24 January, 2001, the Hon'ble High Court of Madras has held that "Section 138 of the Negotiable Instruments Act reads that where any cheque was drawn for payment of any amount of money for the discharge in whole or any part of any debt or other liability and the same is dishonoured by the bank, the person who drew the cheque shall be punishable. Therefore, the cheque drawn should be towards the discharge of either the whole debt or part of the debt. If the cheque is more than the amount of the debt due, I am afraid, Section 138 cannot be attracted. This is a case where the cheque amount was more than the CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 17/19 amount due on the date when the cheque was presented. The presentation of the cheque and subsequent dishonour alone raises a cause of action. When the cheque cannot be said to be drawn towards the discharge of either the whole or part of any debt or liability, Section 138 is not attracted. On this sole ground, the complaint is liable to be quashed and is accordingly quashed." Same position of law has been held by the Hon'ble High Court of Delhi in the case titled as "Lyca Finance Ltd. Vs State and Anr. 2016 SCC Online DEL 4198".
26.Hence, there is nothing coming out of complainant's evidence to convince the court of the existence of a legally enforceable debt or liability of the accused in favour of the complainant. Thus, the second ingredient of the offence i.e., whether the cheque in question (Ex. CW1/7) was drawn by the accused for any legally enforceable debt or other liability is not proved.
FINAL DECISION:-
27.Since the Complainant has failed to discharge his initial burden under Section 138 NI Act, there is no requirement to delve into further evidence in the present case. Thus, in view of the totality of the circumstance and the settled legal positions as discussed above, the case attempted to be built by the complainant, appears to be suffering from fatal infirmities so much so, it goes directly to the root of the case and shakes the very edifice on which the case of the complainant rests.
CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 18/19
28.In the case of 'Kulvinder Singh vs Kafeel Ahmad'', Crl L. P. 478 of 2011, decided on 04.01.2013, Hon'ble Delhi High Court has held that the basic principle in criminal law is that the guilt of the accused / respondent, must be proved beyond reasonable doubts and if there is any slightest doubt about the commission of an offence, then the benefit has to accrue to him. At the same time, it is important to underscore the established canon of criminal law that in order to pass a conviction in a criminal case, the accused ''must be'' guilty and not merely ''may be'' guilty. The mental distance between ''may be'' guilty to ''must be'' guilty is a long one and must be travel not on surmises and conjectures, but by cogent evidence. In this case, the accused successfully rebutted the presumption of consideration and has clearly presented a case which is superior. And as per the settled law, this is all that what is required, as preponderance of probabilities is not a rigorous standard of proof, but only so much evidence as makes the court lean in, in favour of one side and not the other. Consequently, the benefit of doubt must go to the accused.
29.Accordingly, in light of the above discussion, the accused Sh. Anubhav Singhal stands acquitted of the offence under Section 138 of NI Act. DIVYA Digitally signed by DIVYA GUPTA GUPTA Date: 2024.03.28 15:25:19 +0530 Announced in open court (Divya Gupta) in the presence of accused MM-05(NIAct),(C)/THC/ on 28.03.2024 DELHI / 28.03.2024 CC No. 16313/2018 Hitaishi Publishers Pvt. Ltd Vs Anubhav Singhal 19/19