Delhi District Court
M/S. Varun Beverages Ltd. vs . M/S. Janta Pepsi Agencies & Ors. on 2 August, 2022
IN THE COURT OF SH. PANKAJ RAI
METROPOLITAN MAGISTRATE 05 (N.I. ACT), ROUSE AVENUE
COURTS : NEW DELHI
CC No. 40738/16
M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.
1. Complaint Case number : 40738/16
2 Name and address of the : M/s. Varun Beverages Ltd.
complainant having its office at Plot No.2, Surajpur by pass
Greater Noida, UP201306.
Through its AR.
3. Name and address of the : 1. M/s. Janta Pepsi Agencies
accused having office at 409, Reti Mohalla,
Thanabhawan, District Muzaffar Nagar, UP
247777.
Through its proprietor.
2. Mohd. Arrif
proprietor of M/s. Janta Pepsi Agencies
S/o Ahasan, 43, Mridapatti, Charthawal, District
Muzaffarnagar, UP 251311.
4. Offence complained of : Section 138 of the Negotiable Instruments Act,
1881.
5. Plea of the accused : Pleaded not guilty and claim trial.
6. Final Order : Convicted
7. Date of Institution : 18.02.2016
/transfer
8. Date of Reserving the : 21.07.2022
Judgment
9. Date of pronouncement : 02.08.2022
Judgment:
1. Vide this judgment I shall dispose of the complaint filed by the
complainant under Section 138 of the Negotiable Instruments Act, 1881
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(hereinafter referred to as the 'Act ').
2. Brief facts relevant for the decision of the case are as under:
That the complainant M/s. Varun Beverages Ltd. is a company and is in the
trade of soft drinks/aerated water/fruit pulp based drinks and other allied
Pepsi brands as manufacturer and trader and is an anchor bottler of
PEPSICO with multi location plants and network spread at various places
within India and outside India as well. That accused n.o.2 Mohd. Arrif is the
proprietor of M/s. Janta Pepsi Agencies who is accused n.o.1 (hereinafter
referred to as "accused"). That in 2008 accused approached the
complainant and upon the willingness and request of the accused, the
complainant appointed the accused as its distributor for sale and
distribution of various company products in the area of Retti, Thanabhawan
of District Muzaffarnagar, Uttar pradesh pursuant to a distributor agreement
dated 31.12.2008. That the complainant supplied various products to
accused on credit (including cash) basis from time to time, including
entrustment of empty glass bottles and crates belonging to the complainant.
That the complainant has been maintaining regular accounts in the normal
course of business in terms of which the accused, as on 25.03.2015, was
liable to pay a total sum of Rs. 4,87,506/ after adjusting the security
amount against the products supplied and returnable empty glass bottles. In
this amount Rs.1,37,664/ was towards the products supplied to the
accused and Rs.3,49,842/ was towards returnable empty glass bottles and
crates of complainant which were lying with the accused. That the accused
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issued the cheque bearing no. 057432 dated 25.03.2015 for a sum of
Rs.4,87,506/ drawn on Punjab National Bank., Dadheru, Charthawal, Dist.
Muzaffarnagar, UP in favour of the complainant in the ordinary course of
business and in discharge of aforesaid liability. When the complainant
presented the said cheque, it was dishonoured on 11.04.2015. That the
complainant informed the accused about the dishonour of cheque by
sending a legal demand notice dated 28.04.2015 which was was sent to the
accused through counsel by way of speed post and it was duly served upon
the accused. Despite the service of demand notice, the accused has failed
to pay the amount. Thereafter, complainant was filed the present complaint
case with the submission that accused be summoned, tried and punished
according to law.
3. In presummoning evidence, Sh. Ved Prakash Dwivedi, AR of the
complainant examined himself on affidavit Ex. CW1/H. He reiterated the
contents of complaint and placed on record copy of letter of authority as Ex.
CW1/A, Distributor agreement between complainant and accused as
Ex.CW1/B, cheque returning memo dated 11.04.2015 as Ex. CW1/C,
cheque bearing no. 057432 dated 25.03.2015 for a sum of Rs.4,87,506/
drawn on Punjab National Bank as Ex. CW1/D, legal notice dated
28.04.2015 as Ex. CW1/E, postal receipts and tracking report thereof as
Ex. CW1/F and complaint as Ex. CW 1/G.
4. Upon appreciation of presummoning evidence, accused was
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summoned for an offence punishable under Section 138 of the Act and
notice under Section 251 Cr.P.C. for this offence was framed upon accused
on 10.01.2020 to which he pleaded not guilty and claimed trial. He admitted
his signatures on the cheque in question. He denied the liability towards the
complainant. He took the defence that the cheque in question was issued
as a security cheque to the complainant at the time of taking dealership
from the complainant in the year 200708 and that he has stopped working
with the complainant since year 2011 and that he has already made all the
payments to the complainant by way of demand draft in advance and that
the complainant has misused the cheque in question and presented the
same without any intimation to the complainant.
5. Thereafter, AR of the complainant was examined, crossexamined
and discharged as CW1 on 15.02.2020. During crossexamination, he
stated that he had joined the complainant company in August 2014 as
Assistant Manager (legal) and that he has no knowledge of the security
amount taken by the complainant from the accused. He admitted that the
agreement Ex.CW1/B which is annexed alongwith the complaint has
overwriting and that the said agreement got completed in 2013 but the
business was continued with the accused on those terms thereafter as well.
He denied the suggestion that complainant have not renewed the said
agreement with the accused. He stated that it is correct to suggest that
complainant has not annexed any paper in this regard alongwith the
complaint. He also denied that business transaction with the accused
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stopped in the year 2011 and that the complainant company asked for any
security cheque from the accused at the time of signing of the said
agreement Ex.CW1/B. He reiterated that the cheque in question has issued
by accused during course of business to discharge his oustanding liability
and that the complainant company has not raised any objection while
accepting the cheque which is not duly in compliance with RBI Guidelines
2010. He further denied that the complainant has used the present cheque
without any legal debt liability.
6. On 24.09.2021, statement of accused under Section 313 Cr.P.C. was
recorded in which all the incriminating evidence were put to him to which he
took the same defence as was taken by him at the time of framing of notice
under Section 251 Cr.P.C. He admitted the entering into of dealership
agreement between him and the complainant. The accused preferred to
lead defence evidence.
7. In defence evidence, the accused examined himself as DW1 and he
deposed that he entered into dealership agreement with the complainant
somewhere in year 2008 and that the complainant took three to four blank
cheques from him as security for formal starting of business relationship.
That the complainant used to take the amount either in cash or in the form
of demand draft and that the complainant never supplied any goods on
credit basis to him and that the business stopped with the complainant in
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the year 2011 and that the cheque in question had been misused by the
complainant and that he has never issued the cheque for the amount filled
therein to the complainant and that he is not having any legal debt or
liability towards the complainant and that the present case is a false and
fabricated case against him.
During crossexamination, he denied the suggestion that the cheques
were issued in discharge of liability towards the complainant. He denied the
receipt of legal demand notice Ex. CW1/E from the complainant but he
admitted that the address mentioned in it is is correct. He admitted that he
is the proprietor of M/s. Janta Pepsi Agencies and that at the time of
starting of business with the complainant company, an agreement was
entered into between them and that the dealership agreement Ex.CW1/C
bears his signatures. He admitted that the cheque in question was handed
over to one of the representative of complainant company i.e. Mr. Dabral in
around year 200708 and that he has handed over approximately four - five
cheques to him. He stated that the cheque in question was issued as a
security cheque for the purpose of starting business with the complainant
and that the business continued with the complainant company till around
201011. He denied the suggestion that the business continued with the
complainant company uptill year 2013. He admitted that there was no
agreement regarding the termination of business with the complainant. He
stated that at the time of ending of business relationship with the
complainant, the daily business dues were settled by payment in cash. He
further admitted it to be correct that the empty bottles were to be handed
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over to the complainant company and that the empty bottles were to be
returned in lieu of filled bottles. He also admitted that he had no receipt
regarding the payment of amount as made to the complainant. He admitted
that it is correct that he does not maintain any account pertaining to the
business transacted with the complainant. He also admitted that he had in
his knowledge at the time of closure of business with the complainant that
he had earlier issued security cheques to the complainant for the start of
business with the complainant and that despite this, he had never
demanded back the return of said security cheques from the complainant.
He admitted that at the time of closure of his account with the bank, he had
the knowledge that he had already issued the security cheque to the
complainant. He denied the suggestions that he was doing the business
with the complainant till the year 2013 and that till the month of February
2015 there was a legal liability of Rs. 487506/ which includes Rs. 349842/
for the empty bottles and Rs. 137664/ towards other liability and that the
cheque in question was issued for discharge aforesaid legally enforceable
liability.
8. Thereafter, final arguments were addressed on behalf of both the
parties.
9. I have considered the rival submissions of the parties and perused
the entire case record and evidence led by the complainant as well as by
the accused.
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10. Before appreciating the facts of the case in detail for the purpose of
decision, let relevant position of law be discussed first. For the offence
under Section 138 of the Act to be made out against the accused, the
complainant must prove the following points, that:
a. the accused issued a cheque on account maintained by him with a
bank.
b. the said cheque has been issued in discharge, in whole or in part, of
any legal debt or other liability.
c. the said cheque has been presented to the bank within a period of
three months from the date of cheque or within the period of its validity.
d. the aforesaid cheque, when presented for encashment, was
returned unpaid/dishonoured.
e. the payee of the cheque issued a legal notice of demand to the
drawer within 30 days from the receipt of information by him from the
bank regarding the return of the cheque.
f. the drawer of the cheque failed to make the payment within 15 days
of the receipt of aforesaid legal notice of demand.
11. The Act raises two presumptions in favour of the holder of the cheque
i.e. complainant in the present case; firstly, in regard to the passing of
consideration as contained in Section 118 (a) and secondly, a presumption
that the holder of cheque receiving the same of the nature referred to in
Section 139 discharged in whole or in part any debt or other liability.
Section 118 of the N.I Act provides :
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"Presumptions as to negotiable instruments: Until the
contrary is proved, the following presumptions shall be
made: (a) of consideration that every negotiable
instrument was made or drawn for consideration, and that
every such instrument, when it has been accepted,
indorsed, negotiated or transferred was accepted,
indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows:
"Presumption in favour of holder it shall be presumed,
unless the contrary is proved, that the holder of a cheque
received the cheque of the nature referred to in Section
138 for the discharge, in whole or in part, of any debt or
other liability".
12. For the offence under Section 138 of the Act, the presumptions under
Sections 118(a) have to be compulsory raised as soon as execution of
cheque by accused is admitted or proved by the complainant and thereafter
burden is shifted to accused to prove otherwise. These presumptions shall
end only when the contrary is proved by the accused, that is, the cheque
was not issued for consideration and in discharge of any debt or liability etc.
A presumption is not in itself evidence but only makes a prima facie case
for a party for whose benefit it exists. Presumptions both under Sections
118 and 139 are rebuttable in nature. Same was held by the Hon'ble
Supreme Court of India in Hiten P. Dalal v. Bratindranath Banerjee
[(2001) 6 SCC 16].
13. It has been held in M/s. Kumar Exports v. M/s. Sharma Carpets,
C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.
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[2009 A.I.R. (SC) 1518] that the accused may rebut these presumptions by
leading direct evidence and in some and exceptional cases, from the case
set out by the complainant, that is, the averments in the complaint, the case
set out in the statutory notice and evidence adduced by the complainant
during the trial. Further, the burden may be discharged by the accused by
showing preponderance of probabilities and the onus on the accused is not
as heavy as it is on the complainant to prove his case.
14. In the present case, the accused has admitted in the notice under
Section 251 Cr.P.C. that the cheque in question bears his signature and he
has given the same to the complainant. Reference can be made to
Judgment of Apex Court in Rangappa v. Sri Mohan, AIR 2010 SC
1898,that:
"Once the cheque relates to the account of the
accused and he accepts and admits the signatures on
the said cheque, then initial presumption as
contemplated under Section 139 of the Negotiable
Instruments Act has to be raised by the Court in favour
of the complainant."
15. It means that in the present case the onus is upon the accused to
rebut the presumption raised under Sections 118(a) and 139 of the said Act
and merely saying that the cheque in question was given by him to the
complainant as security cheque is not sufficient to rebut the presumption.
C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.
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16. It is contended by Ld. Cousnel for the accused that the accused has
not received the legal demand notice Ex. CW1/E from the complainant and
hence the ingredients of Section 138 NI Act are not satisfied. This
arguments is without any force or substance. Evidently, there is no denial of
fact by the defence that the address at which the legal notice was sent was
the correct and proper address of the accused. The notice was sent through
speed post on 29.04.2015 vide receipts Ex. CW1/F (Colly). The accused
has mentioned the same address at the time of recording of his statement
U/s. 313 Cr.P.C and also while recording his examination in chief as DW1
on 24.09.2021. This was same address which has been mentioned by the
accused on the bail bonds as furnished on record by him. Under such
circumstance there is presumption of due service under section 27 of the
General Clauses Act. There is presumption even with respect to letters sent
through courier or ordinarily post by invoking provisions under section 114
of the Indian Evidence Act with respect to ordinary course of events. Under
such circumstances, the burden would shift on to the accused to rebut the
presumptions and to establish that he did not receive the legal demand
notice Ex. CW1/E despite having been sent at the correct address. The
accused has not led any evidence to show that the letters sent to him
through speed post were not received by him despite addressed correctly.
Therefore, it has to be held that the notice was duly served upon the
accused in ordinarily course of events. It is also not a disputed fact that no
payment was made by the accused despite expiry of statutory period of
fifteen days from such service of legal notice.
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17. It was argued by Ld. Counsel for the accused that it is nowhere
mentioned in the Ex.CW1/B as to who has signed the agreement on behalf
of the complainant and that there is cutting by pen in para 16 of this
agreement and that the complainant has not proved as to how much of the
security amount was taken by the complainant from the accused. It is
therefore submitted by Ld. Counsel for the accused that the said agreement
is null and void and it cannot be the basis of liability of the accused.
In the present matter, as noted, the case put forth by the complainant
was that the accused was appointed as distributor by the complainant and
that there were transactions between the parties where the complainant
had supplied various products to accused from time to time, including
empty glass bottles and crates belonging to the complainant and that the
complainant has been maintaining regular accounts in the normal course of
business in terms of which the accused, as on 25.03.2015, was liable to
pay a total sum of Rs. 4,87,506/ after adjusting the security amount against
the products supplied and returnable empty glass bottles. In this amount
Rs.1,37,664/ was towards the products supplied to the accused and
Rs.3,49,842/ was towards returnable empty glass bottles and crates of
complainant which were lying with the accused. That the cheque issued by
the accused was towards discharge of this liability. Since the signature on
the agreement Ex.CW1/B and more particularly the dishonored cheque was
not disputed by the accused, the presumption as provided in law arises.
This presumption would remain till it is rebutted. The argument of Ld.
Counsel for the accused that it is nowhere mentioned in the Ex.CW1/B as
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to who has signed the agreement on behalf of the complainant and that
there is cutting by pen in para 16 of this agreement and that the
complainant has not proved as to how much of the security amount was
taken by the complainant from the accused are not of much assistance to
the accused. Such considerations are not germane and clearly beyond the
scope of the nature of litigation. Those factors would have been relevant in
a civil suit wherein the validity of the agreement Ex.CW1/B was under
challenge and if the same was raised as an issue and had arisen for
consideration in a suit for specific performance of the agreement. In the
instant case, the accused himself has admitted the execution of this
agreement and the said agreement had been relied upon by complainant
only to the limited extent to indicate that there exists commercial
relationship of supplier and distributor between the complainant and
accused and it has been further averred in the complaint that as per books
of accounts of complainant the accused has a liability of Rs. 4,87,506/
towards the complainant. To that extent the document Ex.CW1/B had been
proved in evidence and such evidence had not been discredited in the
crossexamination. Moreover, the case is based on the dishonour of
cheque in question and not on the basis of said agreement.
18. It was also argued by Ld. Counsel for the accused that the
complainant has not filed any bill/invoice/statement of accounts etc. to
support its claim and thus, the complainant has failed to prove its case
beyond reasonable doubt. There is no merit in this submission of the Ld.
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Counsel for the accused. Once the complainant files the complaint on the
basis that it is holding the cheque as the holder in the due course which is
admittedly given by the accused to the complainant and the said cheque
got dishonour and it is also established that the due notice of dishonour of
the said cheque was given to the accused, there is a clear presumption in
favour of the complainant that the amount is due under the said cheque. In
the present case also, the accused has not denied the issuance of cheque.
He has also not denied his signature on the cheque in question. Apex court
in B.M. Basavaraj v. Srinivas S. Datta MANU/SC/0686/2016 has set aside
the order of trial court and the Hon'ble High Court that had dismissed the
complaint primarily on the ground that the complainant had not furnished
any document to prove that it had actually supplied the material to the
accused as per the agreement. It was held by Apex Court that:
"Once the appellant files a complaint on the basis
that he was holding the aforesaid cheques as
holder in due course which were admittedly given
by the respondent to the appellant and the said
cheques were dishonoured when they were presented for encashment to the Bank and he, further, is able to establish that due notice of the dishonour of the said cheques was given to the respondent as provided in law, there was a clear presumption in favour of the appellant that the money was due under the said cheques. It may be noted that there is no defence to the effect that the cheques were not issued by the respondent or the cheques do not bear its signatures or they were not presented properly for encashment.
In the aforesaid circumstances, it was not even necessary for the appellant to produce any C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.
Page No. 14/22document to the effect that it had fulfilled the obligation under the agreement which was entered into between the parties. The case was founded on the dishonour of the two cheques and not on the basis of the said agreement. Further, it was not a civil suit which was filed on the basis of the said agreement or any demand was raised for money on the ground that the agreement had been fulfilled. The case is that the payment was not released....."
In the instant case also, it is specifically averred in the complaint, affidavit Ex. CW1/H and legal notice Ex. CW1/E that the complainant had supplied various products to accused from time to time, including empty glass bottles and crates belonging to the complainant and a sum of Rs.4,87,506/ was due. Thus, there is no requirement for the complainant to place on record bills, invoices, ledger account, delivery challans or statement of accounts in support of its complaint. The complainant cannot be disbelieved merely because bills, invoices, ledger account or statement of accounts are not filed alongwith the complaint.
19. Casting a doubt on the complainant's case merely on account of non filing of bills, invoices or statement of accounts etc. is of no assistance to the accused as there is no need to go into evidence of complainant and it can't be considered until accused discharges his primary burden under section 139 of NI Act. Also, it must be remembered that once the presumption u/s 139 NI Act is drawn the complainant need not prove its case beyond reasonable doubt by leading further evidences etc., till C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.
Page No. 15/22accused discharges his burden as has been held by Apex Court in Rohit Bhai Jeevan Lal Patel Vs. State of Gujarat 2019 SCC OnLine SC 389. Apex court held in para 17 of this case that:
"17. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the accusedappellant. The aspect relevant for consideration had been as to whether the accusedappellant has brought on record such facts/material/circumstances which could be of a reasonably probable defence."
20. It was also argued by Ld. Counsel for the accused that the cheque in question was issued as a security cheque to the complainant and hence it cannot be said to have been issued in discharge of any legally enforceable debt. The law on the defence of 'security cheque' is well settled. In the case of Credential Leasing & Credits Ltd vs Shruti Investments & Anr 2015 CriLJ 4273 Hon'ble Delhi High Court has held as under:
"30. Thus, I am of the considered view that there is no merit in the legal submission of the respondent accused C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.Page No. 16/22
that only on account of the fact that the cheque in question was issued as security in respect of a contingent liability, the complaint under Section 138 of the NI Act would not be maintainable. At the same time, I may add that it would need examination on a case to case basis as to whether, on the date of presentation of the dishonoured cheque the ascertained and crystallised debt or other liability did not exist. The onus to raise a probable defence would lie on the accused, as the law raises a presumption in favour of the holder of the cheque that the dishonoured cheque was issued in respect of a debt or other liability. As settled by the Supreme Court, the said onus obliges the accused to raise a defence either by picking holes in the case of the complainant and/or by positively leading defence evidence which leads the Court to believe that there is a probable defence raised by the accused to the claim of the complainant with regard to the existence of the debt or other liability. The said onus does not cast as stringent an obligation on the accused, as it casts on the complainant, who has to prove beyond reasonable doubt the guilt of the accused."
In Suresh Chandra Goyal vs Amit Singhal Crl. Appeal Nos.601/2015 decided on 14.05.2015, the Hon'ble Delhi High Court, inter alia, observed as follows:
"28. There is no magic in the word "security cheque", such that, the moment the accused claims that the dishonoured cheque (in respect whereof a complaint under Section 138 of the Act is preferred) was given as a "security cheque", the Magistrate would acquit the accused. The expression "security cheque" is not a statutorily defined expression in the NI Act. The NI Act does not per se carve out an exception in respect of a 'security cheque' to say that a complaint in respect of such a cheque would not be maintainable. There can be mirade situations in which the C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.Page No. 17/22
cheque issued by the accused may be called as security cheque, or may have been issued by way of a security, i.e. to provide an assurance or comfort to the drawee, that in case of failure of the primary consideration on the due date, or on the happening (or not happening) of a contingency, the security may be enforced. While in some situations, the dishonor of such a cheque may attract the penal provisions contained in Section 138 of the Act, in others it may not."
In the recent judgment of the Apex Court in Sripati Singh vs. State of Jharkhand & Anr., 2021 SCC OnLine SC 1002 the Hon'ble Court held as follows:
"17. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow.
18. When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the instalment maturing for repayment C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.Page No. 18/22
towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in a proceedings initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an 'on demand promissory note' and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation."
21. Thus, the legal position that emanates from the above is that it does not make a difference whether the cheque has been given towards payment actually due or for security purposes, what has to be seen by the court is that there should be existing legally enforceable debt or liability as on the date mentioned on the cheque. It is also settled law that the sole proprietor and its firm are one and same thing. In the instant case, if the C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.
Page No. 19/22accused had really issued the cheque in question as a security cheque to the complainant, there is no explanation as to why he did not protest or demanded his cheque from the complainant if he has stopped doing business with the complainant in the year 20102011 as alleged by him during his cross examination. Section 103 of Evidence Act provides that burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence. The burden to prove this fact lies on accused as per Section 103 of Evidence Act. On the contrary the accused himself has admitted in his crossexamination that he had never demanded back the return of security cheques from the complainant. The accused also could have produced evidence to show as to how much security amount was taken by the complainant from him at the start of distributorship with him but the has failed to do so. The accused has further admitted in his crossexamination that he had no receipt regarding the payment of amount as made to the complainant and that he does not maintain any account pertaining to the business transacted with the complainant. Only a vague statement has been made by accused during his cross examination that daily business dues were settled with the complainant by payment in cash, which is nothing but a self serving statement on his part. The conduct of the accused does not appear to be of a prudent man and does not inspire any confidence. Since the accused was having legally existing debt/liability against the complainant, the complainant was entitled to recover the same by depositing the cheque in question with its banker irrespective of the fact that it was issued by accused at the time of his appointment as distributor by the complainant. As noted above, when a cheque is issued even though C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.
Page No. 20/22as 'security' the consequence flowing therefrom is also known to the drawer of the cheque. It is not the case of the accused that there being an altered situation due to which there exists any understanding between the parties to not present the cheque in question. Hence merely stating that cheque in question was issued as a security cheque to the complainant is not sufficient to discharge the reverse onus of proof as casted upon the accused. The accused has failed to prove his case by cogent evidence
22. Ld. Counsel for the accused has also argued that the complainant has misused the cheque in question. A perusal of record shows that the accused has not filed any complaint against the complainant for the alleged misuse of his cheque. There is also merit in the submission of Ld. Counsel for the complainant that the accused has never intimated to the complainant at any stage regarding the closure of bank account and this by itself shows that the stand of accused lacks bonafide. Therefore, the above argument of misuse of cheque is also without any basis.
23. In terms of the above discussion, the above defences of the accused are merely an ipse dixit of the accused and appears to be too farfetched and sham. They cannot be construed as a probable defence. A defence would be considered to be probable if it appeals to the Court as probable and reasonable keeping in mind the natural course of conduct of a prudent human being of reasonable intelligence.
C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors.
Page No. 21/2224. In view of the above, this court is of the considered opinion that in the present case, accused has failed to rebut the presumption in favour of complainant either on the basis of material available on record or by adducing any cogent defence evidence. Therefore, complainant has successfully proved its case against the accused that the accused had duly issued the cheque in question in favour of complainant, in discharge of legally subsisting debt/liability and the cheque was presented to the bank for payment within the period of its validity, but the cheque had been returned unpaid for want of sufficient funds in the account of the accused in the bank on which the cheque was drawn and that the statutory notice of dishonor was duly issued to the accused and the accused had failed to make the payment of the cheque amount within the prescribed time. The argument of the accused that the accused has adduced sufficient material on record to prove his case and reverse the onus of proof placed upon him, is liable to be dismissed, as discussed above.
25. Accordingly, accused Mohd. Arrif, proprietor of M/s. Janta Pepsi Agencies stands convicted of the offence u/s 138 NI Act.
Let a copy of the judgment be given to the convict free of costs. Now to come up for arguments on the point of sentence.
Announced in the Open Court (PANKAJ RAI) on 2nd Day of August, 2022 Metropolitan Magistrate05, NI Act RAC/New Delhi/02.08.2022 C.C. No. 40738/19 M/s. Varun Beverages Ltd. Vs. M/s. Janta Pepsi Agencies & Ors. Page No. 22/22