Delhi District Court
Sh. Mahender Singh Rajpurohit vs M/S. Vee Pee International Pvt. Ltd on 6 September, 2017
Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017
IN THE COURT OF SH. PULASTYA PRAMACHALA
SPECIAL JUDGE (PC ACT) CBI : EAST DISTRICT
KARKARDOOMA COURTS, DELHI
Criminal Appeal Nos. : 116/2017 & 117/2017
Under Section : 138 of Negotiable Instruments Act, 1881.
Police Station : Anand Vihar
CC Nos. : 52896/16 & 53527/16
CNR Nos. : DLET01-008302-2017 &
DLET01-008303-2017
In the matter of :-
SH. MAHENDER SINGH RAJPUROHIT
S/o. Sh. Madan Singh,
R/o. 1151, Gokul Bhawan,
Heritage Gali, Chaura Rasta,
Jaipur, Rajasthan.
............APPELLANT
VERSUS
M/S. VEE PEE INTERNATIONAL PVT. LTD.
Through its AR Sh. Jagdish Sharma,
O/o. IX/6493, Nehru Gali,
Gandhi Nagar, Delhi-110031.
............RESPONDENT
Date of Institution : 17.07.2017
Date of Receiving : 18.07.2017
Date of reserving judgment : 30.08.2017
Date of pronouncement : 06.09.2017
Decision : Appeals are dismissed.
JUDGMENT
1. These two criminal appeals are directed against the judgments of conviction dated 23.06.2017 and orders on sentence dated 24.06.2017, passed by the trial court, in the cases titled as M/s. Vee Pee International Pvt. Ltd. v. M/s. Dhan Laxmi Fashions & Ors. bearing CC No.52896/16 and CC no. 53527/16 under Section 138 of NI Act, PS Anand Vihar. Vide impugned judgments of conviction dated 23.06.2017, the trial court convicted accused Mahender Singh Page 1 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 Rajpurohit (appellant herein) for aforesaid offence and vide impugned orders on sentence dated 24.06.2017, the trial court sentenced convict/appellant herein in CC No. 52896/16 to undergo simple imprisonment for a period of four months and to pay a fine of Rs. 25,00,000/-, out of which Rs. 24,90,000/- was to be paid as compensation to the complainant and Rs.10,000/- as fine to the State. In default of payment of fine, convict was to undergo simple imprisonment for a period of four months. Trial court sentenced appellant in CC no. 53527/16 to undergo simple imprisonment for a period of six months and to pay a fine of Rs. 45,00,000/-, out of which Rs. 44,90,000/- was to be paid as compensation to the complainant and Rs.10,000/- as fine to the State. In default of payment of fine, convict was to undergo simple imprisonment for a period of six months.
BRIEF FACTS OF THIS CASE : -
2. Briefly stated, the relevant facts giving rise to these appeals are that respondent (hereinafter referred to as complainant) filed two separate complaints for offence under Section 138 NI Act against appellant (hereinafter referred to as accused no.2) and his firm along with two more accused persons. Proceedings against accused no.3 and 4 were quashed by the High Court of Delhi and accused no.5 was declared PO. Complainant alleged that accused persons introduced themselves as partner of accused no.1 firm namely M/s.
Dhan Laxmi Fashion and they approached complainant office for purchase of goods on credit. They further represented that they had a transaction with complainant firm in June 2010. This time they purchased cloth vide bill no.8645 dated 21.10.2010 for Rs.20,18,750/-, out of which Rs.18,750/- was paid in cash at the time of purchase and balance amount of Rs.20 lakh was paid vide two cheques signed by accused no.2. The cheques were got filled Page 2 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 through other person introduced as manager of accused no.1 firm. Cheque no.208585 was dated 23.10.2010 and cheque no.208586 was dated 24.10.2010, both for the sum of Rs.10 lakh.
3. Again they purchased cloth vide bill no.8634 dated 20.10.2010 for Rs.30,19,003/-, out of which Rs.19,003/- was paid in cash at the time of purchase and balance amount of Rs.30 lakh was paid vide three cheques signed by accused no.2. The cheques were got filled through other person introduced as manager of accused no.1 firm. Cheque no.208582 was dated 20.10.2010, cheque no.208583 was dated 21.10.2010 and cheque no.208584 was dated 22.10.2010, all for the sum of Rs.10 lakh each.
4. On presentation of these cheques at New Delhi, they were returned unpaid with remarks of "funds insufficient" vide return memo dated 25.10.2010. Thereafter, complainant through its officials approached accused persons and made request for the cheques amount. On their assurances, cheques were again presented in the second week of December 2010, however, this time once again both cheques were returned unpaid vide return memo dated 16.12.2010 on account of "account closed." A legal demand notice dated 13.01.2011 was sent to accused persons through courier on 17.01.2011 and through UPC on 14.01.2011, which were duly served upon them. Still, the cheques amount were not paid, hence, complaint was filed.
5. On 26.03.2012, trial court framed notice under Section 251 Cr.P.C against appellant in both cases, to which he pleaded not guilty and claimed trial. Sh. Jagdish Sharma authorized representative of complainant company had filed his affidavit, who testified in support of case of complainant. Appellant was examined under Section 313 Cr.P.C and he examined his father i.e. accused no.3 as DW1. He examined himself as DW2. An official from Public Health and Engineering Department, Jodhpur, Rajasthan was summoned as Page 3 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 DW3. Thereafter, defence evidence was also closed. Final arguments were heard and trial was concluded by convicting the accused vide impugned judgments of conviction dated 23.06.2017 and orders on sentence were passed against convict vide impugned orders dated 24.06.2017.
GROUNDS :-
6. Being aggrieved of impugned judgments of conviction and orders on sentence, appellant has preferred these appeals mainly on the following relevant grounds :-
● That the trial court failed to appreciate the fact that the complainant's witness namely Sh. Jagdish Sharma's testimony cannot be relied as he improved his evidence many times during examination, such as firstly he denied that "the complainant did not allot any code number to its customer." Further, he did not tell when the first business transaction was done and how much amount of it was. Further, in his testimony he specifically denied that the complainant is doing business of readymade garments, whereas the bill in questions clearly shows that respondent/ complainant doing business of readymade garments. That in such circumstances complainant witness cannot be relied as he changed his stands.
● That the trial court failed to appreciate the fact that the complainant witness was not the competent witness and his testimony does not inspire confidence.
● That the trial court failed to appreciate that complaint filed by complainant is covering the lacunae as the complainant knew very well this fact that the Dhanlaxmi is the proprietor firm and Mahender Singh Rajpurohit is it's proprietor, despite knowing this fact they deliberately made other accused i.e. to his father, brother and his employee. Later on, the same fact was appraised by High Page 4 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 Court of Delhi and High Court of Delhi was pleased to quash the summoning order against the Madan Singh and Rajender vide order dated 06.03.2013.
● That the trial court failed to appreciate that accused Mahender Singh Rajpurohit very well rebutted the presumption as he falsified the complainant story that his brother, father and one of his employee approached complainant in their office and they themselves told complainant that they are day to day in charge and responsible for daily affairs of the firm. That DW1/Sh. Madan Singh clearly stated in his examination-in-chief that he was working as pump operator and on 20-21.10.2010 he was attending his duty. He also placed his attendance certificate. Thus, this can be easily said that none of the accused was present on 20-21.10.2010 at Delhi and they did not visit complainant shop. ● That the trial court did not appreciate that complainant had taken plea that he had received cash of Rs.18,750/- out of Rs.20,18,750/- and further taken plea that they have received two cheques of Rs.10,00,000/- each. That the accused rebutted the above said version of the complainant as CW1 clearly denied that they did not issue any cash receipt of Rs.18,750/-, which is highly improbable. As such there was no transaction of cash that is why the complainant could not bring on record the cash receipt of Rs.18,750/-.
● That the trial court did not appreciate that complainant had taken plea that he had received cash of Rs.19,003/- out of Rs.30,19,003/- and further taken plea that they have received three cheques of Rs.10,00,000/- each. That the accused rebutted the above said version of the complainant as CW1 clearly denied that they did not issue any cash receipt of Rs.19,003/-, which is highly improbable. As such there was no transaction of cash that Page 5 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 is why the complainant could not bring on record the cash receipt of Rs.19,003/-.
● That the trial court failed to appreciate that entire bill book was exhibited but except the two bills in question, none of the bill was having of such heavy amount. Furthermore, except the two bills in question, every bill having the transportability and vehicle number, hence, the accused rebutted the presumption that he had not purchased the goods against that bills in question. ● That the trial court failed to appreciate that accused rebutted the presumption that cheques in question were never given against the purchase of goods in the month of October 2010, however, same were given as a security in the month of June 2010. ● That the trial court failed to appreciate that cheques in question were given as security in the month of June 2010 and were bearing signature of Sh. Mahender Singh Rajpurohit and the other contents in the cheque was filed by the complainant company later on.
● That the trial court failed to appreciate that while issuing a cheque, no person will ask the accompaning person to fill up the other contents on the cheques and later on, he will sign on cheque, whereas the complainant has taken this plea that the cheques were filed up by the third person and appellant signed it. ● That the trial court gravely erred while not appreciating the fact that the bill enclosed by the respondent/ complainant with the complaint was false and fabricated as the respondent/ complainant had failed to produce high price sale to other buyer and business transactions.
● That the trial court gravely erred in not appreciating the fact that the bill enclosed by the respondent/complainant with the complaint had not been signed by the appellant/accused at the time of taking Page 6 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 the delivery of goods. That moreover, it is the prevailing practice in the business that while receiving any bills/ goods the recipient has to sign for acknowledgement.
● That the trial court gravely erred in not appreciating the fact that respondent failed to produce the transportation bill. That as CW1 had stated in his examination-in-chief that appellant himself took the delivery of goods, but CW1 did not produce any evidence which shows the same. CW1 had failed to produce any receiving in the form of signature/ endorsement on any register/copy of alleged bill of the appellant or his representative. ● That the trial court gravely erred in not appreciating the fact that the quantity of the goods shown in the bill, cannot be transported in a car or small tempo. That CW1 himself admitted in his cross- examination that goods of that quantity could be transported by way of TATA-407 or truck. It is pertinent to mention here that it is not possible to carry goods in car from Delhi in Jaipur. ● That the trial court gravely erred in not appreciating the fact that the bills (i.e. DW2/G, DW2/H, DW2/I, DW2/J, DW2/K and DW2/L) produced by appellant in his defence evidence show that the respondent was a commission agent/ broker and there was no direct business transactions/dealing/nexus with the respondent in any manner, whatsoever for purchasing the goods. Whereas the complainant witness in his chief examination denied that the complainant was not a commission agent and he also denied the suggestion in this regard, therefore, CW1 cannot be relied upon. ● That the trial court gravely erred in not appreciating the fact that the respondent failed to prove the legal liability against the appellant. Respondent miserably failed to prove its case against the appellant. (Reliance was placed upon 2009 (2) DCR Page 302 (Delhi High Court)). Reliance was also placed upon Kumar Page 7 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 Export v. Sharma Carpets, 2009 (1) CCR 100 (SC). ● That the trial court not properly considered and appreciated the evidence on record. The impugned judgment covering the issues involved in the case have not been properly considered and appreciated. The finding recorded by the trial court is totally against the evidence on record which is not tenable in the eyes of law.
ARGUMENTS :-
7. Ld. counsel for appellant argued that appellant never issued cheques against any liability, however, the cheques in question were issued towards security against purchase from sellers at Surat and Mumbai. Complainant company was merely a broker, which had taken the cheques as security. Ld. counsel further argued that as per complaint father of appellant (DW1) had also come with him, but DW1 proved that he never came to Delhi, before this case. DW1 proved attendance sheet from 20.10.2010 to 25.10.2010, when DW1 accompanied complainant. Ld. counsel further argued that DW3 also brought record of attendance of DW1 from 18.10.2010 to 25.10.2010. Ld. counsel further argued that bills Ex.CW1/18 are forged and manipulated by complainant. Since the amount on cheques were filled by complainant themselves and they filled Rs.10 lakh on each cheque, therefore, they came up with story of cash payment so as to cover the amount of bills in exact terms. Ld. counsel further argued that there is no cash receipt which was issued by complainant. Entire bill book was proved and no other bill was of such heavy amount. Ld. counsel further argued that there is no TIN number mentioned in the bill, but in other bills TIN number is mentioned and even CST was added. Other bills also mentioned particular of carriers and GR number, but his bill does not mention description of good like other bills. Therefore, bills in question were created and manipulated bills.
Page 8 of 26 (Pulastya Pramachala)Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 Ld. counsel further argued that it is highly improbable that receipt of delivery of goods worth Rs.50 lakh would not be taken by seller. The cheque leaf issued by appellant shows cheque no.587 was issued in June 2010 and other cheques in question were also issued in June 2010. Ld. counsel for appellant further argued that goods/ clothes worth Rs.50 lakh could not be taken in car, that too from office of complainant, because so much goods could not be expected to be kept in the office of complainant. Ld. counsel further argued that Ex.DW2/M shows agent number of appellant, though CW1 denied giving such code number to customers. CW1 cannot be relied upon as he is assumed to know everything about the case. Ld. counsel further argued that Delhi High Court quashed complaint against accused no.3 and 4, which further supports the contention of appellant that false averments were made in complaint to say that all accused came together. Ld. counsel further argued that cheques were filled in by third party and complainant only signed it. In the cross-examination of accused/appellant herein, no suggestion was given that his manager had filled the cheques. Series of cheque numbers and time of transaction are very relevant. One transaction took place in May and June and a cheque was given from same serial number of cheques and cheques in question were issued at that time only. Ld. counsel further argued that complainant did not file any Income Tax Department's document to show liability of accused.
8. Per contra, ld. counsel for respondent supported the impugned judgment and order on sentence passed by trial court, submitting that ld. MM passed correct order. Ld. counsel further argued that no reply was given to his notice by accused/appellant herein and descriptions of accused were given as per information given by accused and his companions. More than one cheque could not have been security cheques, which were allegedly given. Ld. counsel further argued that Page 9 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 all cheques were in possession of accused and complainant had nothing to do with series number of cheque. Ld. counsel further argued that no case/complaint was made by accused and accused did not rebut the presumption.
9. Ld. counsel for appellant/accused relied upon certain judgments in support of his contentions, which are as follows :-
● Krishna Janardhan Bhatt v. Dattatraya G. Hegde, AIR 2008 SC 1325.
● Kumar Exports v. Sharma Carpets, 2009 1 JCC NI 34. ● Vipul Kumar Gupta v. Vipin Gupta, 2012 (4) JCC (NI) 248. ● Vinay Parulekar v. Sh. Parmod Neshram, 2008 Crl.J 2405. ● M/s. Kalpana Mines and Minerals v. Muneer Enterprises, 2017 (2) JCC NI 98.
● Veena Rani Chhabra v. Manju Rohida, 155 (2008) DLT 447. ● S.S. Chouhan v. State & Anr. 2012 (2) JCC NI 97.
10.In the case of Krishna Janardhan (supra) ld. counsel for appellant/ accused relied upon the observations to the effect that for discharging the burden placed upon accused, he need not examine himself. Prosecution must prove the guilt of accused beyond all reasonable doubt and the standard of proof to prove a defence on the part of accused is preponderance of probabilities and inferences can be drawn from the circumstances as well.
11. In the case of Kumar Exports (supra) same was the ratio in respect of burden cast upon the accused to rebut the presumption under Section 118 and 139 NI Act. It was though further held in this case that to disprove the presumption, accused should bring on record such facts and circumstance, upon consideration of which, the court may either believe the fact in issue or the non existence of the same as so probable that a prudent man would, under the circumstances of the case, act upon the plea that they did not exist.
12.In the case of Vipul Gupta (supra) Delhi High Court had taken notice of cheques in question written with two different inks going against the factum of loan and notice of absence of the date, time or year of Page 10 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 the loan being given to the accused, while deciding in favour of accused that such cheques were given as security only.
13.In the case of Vinay Parulekar (supra) Bombay High Court once again reiterated that if accused discharged the initial onus of proof by showing that existence of consideration was improbable or doubtful, the onus would shift upon the complainant.
14.In the case of M/s. Kalpana Mines (supra) the Bombay High Court reiterated same legal principles which are laid down in the case of Krishna Janardhan (supra) and Kumar Exports (supra).
15.In the case of Veena Rani (supra) Delhi High Court took consideration of inconsistency in the evidence of complainant about issuance of cheque, which was treated as fatal stating that guilt of accused has to be proved beyond any shadow of doubt.
16.In the case of S.S. Chouhan (supra) also the court came to the conclusion that presumptions were duly rebuted.
17.Ld. counsel for respondent/complainant relied upon certain judgments in support of his contentions, which are as follows :-
● Bharat Bhushan v. State & Anr., Crl. Rev. P. No.126/2011 decided on 23.08.2011.
● Kamruddin Ali v. Citi Financial & Ors., Crl. Rev. P. No.280/2012 decided on 23.05.2012.
18.In the case of Bharat Bhushan (supra) High Court of Delhi upheld conviction of accused under Section 138 NI Act and referred to judgment passed by Supreme Court in the case of Hiten P. Dalal v. Bratindranath Benergee, 2001 (2) JCC (SC) 51. In this case Supreme Court while discussing the presumptions being rule of evidence, made following observations :-
"In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with innocence" of the accused. On the other hand in the case of a mandatory presumption the burden resting on Page 11 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible."
19.In the case of Kamruddin Ali (supra) once again conviction of accused for offence under Section 138 NI Act was sustained by negating the defence that cheque in question was given in blank and as a security.
APPRECIATION OF EVIDENCE AS WELL AS ARGUMENTS AND FINDINGS :-
20.At the time of framing of notice under Section 251 Cr.P.C, accused no.2 admitted that the cheques bore his signature and pertained to his account. He also admitted that he had issued these cheques to the complainant. He pleaded that the cheques were issued as security. He further admitted having received legal notice from the complainant, but added that he was not sure, if it was same legal notice, which was filed in the present case. At that time, he took plea that the cheques were given to complainant as security as he had purchased readymade garments from the complainant. He had made certain payments to the complainant against rough receipts issued by complainant. He asked the complainant to return the cheques against whom the payments were already made vide rough receipt. He had told complainant to keep the cheques for the payment, which had not been made. However, complainant did not return his cheques. On receiving the notice from the complainant, he contacted him and he was told to tear the notice. He further took plea in respect of status of his father and brother (accused no.3 and 4) as well as Page 12 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 accused no.5 stating that they had nothing to do with his firm.
21.Accused no.2 filed application under Section 145 (2) NI Act to get opportunity to cross-examine complainant. In this application he pleaded that he was having business relations to purchase the cloth from the complainant. Complainant had taken 10 blank signed and undated cheques from him as security. Due to loss in business, accused no.2 changed his place of business and demanded back the blank signed and undated cheques from the complainant, but the complainant avoided the same on one or other pretext. Complainant misused blank security cheques after filling the same and filed present case to extort money.
22.Since complainant admitted that the cheques were signed by him and were drawn on his account, which were given to the complainant, the presumptions under Section 118 and 139 NI Act came into operation. These presumptions were to be rebutted by accused no.2. I need not repeat the legal principles, which have already been mentioned herein above. Suffice is to say that accused no.2 had to establish the plea taken by him by way of preponderance of probabilities so as to show absence of any consideration against cheques in question. For this purpose, accused no.2 cross-examined CW1 at length and he examined his father as DW1, himself as DW2 and an official from office of his father as DW3.
23.Since the accused has taken a positive plea that the cheques were given towards security only, without having any other liability, I would prefer to start discussion on the basis of testimony of accused no.2. As per testimony of accused no.2, complainant was a commission agent, who provided readymade garments to the buyers on behalf of out of station sellers and get the commission for the same from the manufacturers/sellers. He started business with complainant in April 2010 and his transactions started from Ahemdabad and Bombay Page 13 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 Branch of the complainant. He was given an account code number and he had business transactions with complainant for some time. He was asked to give security cheques to satisfy the policy of complainant company and he had given six blank signed cheques bearing no.208582, 208583, 208584, 208585, 208586 and 208587 to the complainant on 04.06.2010 at Delhi. Out of six cheques, complainant kept five cheques as security and encahsed one cheque by filling amount of Rs.5000/-. This cheque was bearing no.208587, which was encashed on 10.06.2010. Accused no.2 objected against presentation of this cheque of Rs.5000/- because it was also taken as security, but he was told that it was practice of complainant to bring sum of Rs.5000/- from every party, which was returned to the party at the end of financial year. Accused no.2 further asked about his other cheques given towards security and he was told that those cheques were kept as security after filling amount of Rs.10 lakh in each cheque.
24.Accused no.2 had recorded issuance of six cheques in favour of complainant in the cheque leaf attached with the cheque book i.e. Ex.DW2/F. Later on, accused no.2 started business with the businessmen who were referred by complainant company. These companies supplied goods to him vide different bills mentioning that complainant company was broker agent. Complainant company used to send statement of account to the accused on monthly basis, which was proved as Ex.DW2/N. An official of complainant namely Sh. Manish Rakheja used to supply the cash receipt in the name of Z+ and Sh. Radhey. The receipts were issued mentioning 10% amount of actual amount paid to complainant. The complainant company used to issue cash receipts to accused no.2, though the goods were purchased by him from different businessmen of different states. Complainant pointed out that he should be given cash receipts Page 14 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 issued by the manufacturer and he was assured by Sh. Manish Rakheja that the same would be issued only by Z+ and Sh. Radhey Company. These two companies were stated to be sister company of the complainant.
25.Later on, accused no.2 started having direct business dealing with the manufacturers, which fact came into knowledge of complainant company. Complainant company threatened accused no.2 not to have direct business with manufacturer companies. They also threatened him that they would ask the manufacturers not to supply goods to accused no.2. Complainant company further threatened that if accused continued dealings with said businessmen, then complainant company would present security cheques, which were given in June 2010. When such threat was given by complainant company, then accused no.2 wrote a letter to his banker on 26.10.2016 to stop payments of security cheques. He informed complainant company verbally about such instructions given to his banker. Since, he had started purchasing materials directly from suppliers, therefore, complainant misused the cheques which were given as security.
26.In his cross-examination, accused no.2 deposed that he did not reply to legal notice because when he contacted complainant company, then he was asked not to consider the same, as such legal notice was sent in routine manner and because accused no.2 was making the regular payments. He further deposed that he used to fill the counter foils of the cheques then and there, at the time of issuance of cheque and some times later on. He admitted that name of complainant company on cheque issuance leaf i.e. Ex.DW2/F was written with red pen in one column and rest of the columns were left blank. Particulars of cheque number 208587 was written with blue ink, which was also issued to the complainant company. He further Page 15 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 deposed that in usual course of business, he never accepted receipts of any other party than the party from whom purchases were made. He used to receive the bills from the parties i.e. sellers, which were exhibited by him as Ex.DW2/F to Ex.DW2/L. When he was asked to explain that he had stated that complainant company had assured him to arrange bills for the purchases from the seller company, but they did not do so and he had also deposed that he used to receive bills from the parties from whom he used to purchase the goods, then which of these versions was correct. Accused no.2 replied that he used to receive the bills from the parties and he did not receive the cash receipts from the original purchaser (sie sellter). He could not remember the last transaction taken place with the complainant company and he deposed that he stopped transaction with complainant after misuse of his cheques. He did not make any written complaint regarding threat given by complainant company. He admitted that he had made request to his banker to stop payment, after dishonor of cheques in question. He did not remember the number of transactions and the amount involved with the complainant company.
27.On comparison of such testimony of accused no.2 and the plea taken by him at the time of notice under Section 251 Cr.P.C as well as in the application under Section 145 (2) NI Act, I find that accused no.2 had been taking different plea at different times. In his plea recorded under Section 251 Cr.P.C, accused no.2 told that cheques were given as security as he had purchased readymade garments from the complainant and he had made certain payments to the complainant against rough receipt. In his application under Section 145 (2) NI Act, he took plea that he had given 10 blank signed and undated cheques, though in his testimony as DW2 he stated that he had given six cheques as security. In his application under Section Page 16 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 145 (2) NI Act accused no.2 took plea that because of change of place of his business, he demanded back the blank and undated cheques. However, this plea is not consistent with his previous plea that he had asked complainant to return cheques in respect of which payments were already made and to keep those cheques for which payment was not made. In his testimony before the court, accused no.2 presented a different scenario altogether, stating that complainant had filled amount of Rs.5,000/- in one of the security cheques, which was encashed on 10.06.2010 and he had resented for such act of the complainant. At the same time he was informed that his other cheques were filled in the sum of Rs.10 lakh. Meaning thereby that accused no.2 had the knowledge that the cheques given by him were filled for the sum of Rs.10 lakh. It further reflects as if accused no.2 himself had not filled the amount of cheque.
28.Accused no.2 had referred to cheques issuance leaf from his cheque book and he vouched that this leaf was generally filled at the same time of issuance of the cheque. As per testimony of accused, he had handed over six blank signed cheques to the complainant on 04.06.2010. In that situation as per stand taken by accused, he would have filled this leaf at the same time. However, if the leaf was filled at the same time in respect of all six cheques, then there was no occasion to use two different inks to make the entries in this leaf for different cheques, given on same date and same time.
29.Furthermore, if the amount of cheques were not so filled at the time of handing over the cheques, then their amount in the corresponding column could also not have been mentioned by accused in this leaf. However, this cheque leaf shows that all the amounts were duly mentioned. Different spelling of complainant's name was used while filling the leaf in respect of six cheques in question.
30.Ld. counsel for appellant had argued on the basis of cross-
Page 17 of 26 (Pulastya Pramachala)Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 examination of CW1 that in June 2010 amount of Rs.5000/- was paid through cheque bearing no.208587 and the cheques in question are having series numbers prior to the aforesaid cheque. In normal course of action, these cheques having number prior to cheque no.208587 could not have been issued in the month of October 2010.
31.I am unable to accept this argument for two reasons. One reason is based on the rebuttal argument of ld. counsel for complainant that it was beyond control of the complainant company to decide that which particular cheque number should be given to them. The second reason is based upon the document relied upon by appellant himself, which is the cheque leaf Ex.DW2/F. On careful scrutiny of this cheque leaf, I can find that there were many cheques which were issued on different dates and the dates were not in ascending order. To provide some examples, it can be pointed out that this leaf shows that cheque having last digit as 572 was issued on 27.06.2010 and the next cheque bearing last digit as 573 was issued with date of 01.06.2010. The next cheque having last digit as 574 was again issued with date of 19.06.2010. The next cheque was issued with date of 21.06.2010, but thereafter other cheque with last digit as 577 was issued with date of 20.06.2010. The cheque with last digit as 578 was issued with date of 22.06.2010 and the next cheque with last digit as 579 was again issued with date of 01.06.2010. The next cheque with last digit as 580 was issued with date of 03.06.2010 and thereafter, the next cheque was issued with date of 07.06.2010. No dates were mentioned for cheque having last three digit as 582, 583, 584, 585 and 586 (cheques given to the complainant). The cheque with last digit as 587 was given date of 04.06.2010 (given to complainant). The next cheque with last digit as 588 was issued with date of 07.06.2010. Thus, it is well apparent that the appellant had been issuing cheques from the same cheque book, without following Page 18 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 any particular pattern so as to issue cheques one after another. The pattern emerging from this cheque leaf shows that he had been keeping some cheques and issuing the subsequent cheques thereafter, issuing the previous cheque. Such practice of appellant rather goes on to show that the appellant had been nurturing some sort of calculation in his mind, so as to issue cheques randomly rather adopting the practice of issuing one cheque after another.
32.Now if I look into the cross-examination of CW1 conducted on behalf of appellant, I find that it was suggested by appellant himself that in June 2010, there was a transaction in the sum of Rs.5000/-, which was paid through cheque bearing no.208587 on 04.06.2010. This suggestion is contradictory to the testimony of appellant, wherein he stated that this particular cheque was also given as security and amount of Rs.5000/- was filled by complainant on their own and they got it encashed, to which appellant had raised objection.
33.Ld. counsel for appellant also relied upon the fact that the body of cheque was not completely filled by appellant and this fact shows that the cheques were given in blank as security. This argument is once again not impressive because the contradiction in the stand taken by appellant have already been pointed out by me, wherein at one time he projected as if the cheques were given without even filling the amount and he was informed by complainant that the other security cheques were filled by them with the amount of Rs.10 lakh. In fact, during cross-examination of CW1, appellant suggested that cheques in question were only signed by him and other part of it were not in his handwriting. This suggestion also reflects the same stand of appellant that amount of Rs.10 lakh was not filled by him. CW1 had denied the suggestion and he further stated that amount in word as well as in figure were written by appellant himself, while the name of company was written by his manager. I have already pointed out Page 19 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 that in the cheque leaf Ex.DW2/F appellant had duly mentioned amount of all these cheques in question as Rs.10 lakh. Thus, even this stand taken by him stands falsified.
34.Furthermore, in the case of Manoj Sharma v. Anil Aggarwal, 2013 (1) RCR (Criminal) 61, Delhi High Court held that :-
"It is not mandatory and no law prescribes that the body of the cheque should also be written by signatory to the cheque. The cheque could be filled up by any body, if it is signed by the account holder of the cheque, accepting the amount mentioned therein. In view of this dictum and the law as laid down in the aforesaid cited two judgments (P.S.A. Thamotharan v. Dalmia Cements Pvt. Ltd. 2005 (1) RCR (Criminal) 1002 and Ravi Chopra v. State, 2008 (2) JCC (NI) 169 (DHC)), and keeping in view the true spirit of Section 20 and 87 of NI Act, the proof of filling up of these negotiable instruments by the respondent or any other person, would not be of any relevance."
35.Appellant had admitted that he had received the legal notice, but it is admitted case that appellant did not reply to that legal notice of complainant. In his plea taken at the time of 251 Cr.P.C, appellant took plea that on receiving the notice, he contacted complainant and he was told that the notice should be torn away. He had also stated that he resented with the complainant that such notice should not be issued because he was making payments. During his cross- examination, appellant stated that he did not reply the legal notice because when he contacted the complainant company after receiving legal notice, he was asked not to consider the same as it was sent in routine manner and as appellant was making the regular payments. Such plea taken by appellant is once again inconsistent with his other stand taken in this case. Appellant had taken stand in his testimony that he was threatened by complainant that if appellant did not stop directly transacting with the manufacturers, then they would present the security cheques lying with them. Appellant further took plea that Page 20 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 when he was given such threat, then he wrote a letter to his banker i.e. HDFC Bank on 26.10.2010 for stopping the payments of security cheques. He produced photocopy of such letter, which is marked as DW2/R.
36.The aforesaid situations could not coexist because either appellant could have asked the complainant to keep those security cheques against whom payments were not received (plea taken at the stage of 251 Cr.P.C) or appellant could have relied upon the assurance given by complainant that since appellant was making payments, therefore, he should ignore that notice and tore it away or appellant demanded back his blank and undated cheques from the complainant after changing his place of business (as pleaded in application under Section 145 (2) NI Act).
37.It is also worth to be seen that once appellant allegedly started having direct dealings with manufacturers thereby leaving the channel of complainant to procure goods, then there was no occasion for appellant to make any payment to the complainant. Appellant himself testified that he did not have any transaction with complainant after misuse of his cheques. Therefore, ignoring legal notice on the pretext that he was already making payments to the complainant was not possible. That too in the situation that appellant had been threatened by the complainant to present the security cheques and for such reasons he was compelled to write to his banker to stop payment of these cheques by closing his account immediately. In the background of alleged threats given to the appellant and absence of any legal liability towards the complainant and the fact that appellant could realised that the cheques given by him toward security only were being misused by complainant, it was highly improbable that appellant would not have opted to reply to the legal notice dated 13.01.2011, which would have been received by Page 21 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 him after 13.01.2011 only. As on 13.01.2011 and thereafter, there could not have been any situation that appellant was making payments to the complainant despite the fact that he was not having any transaction with them. So the reason given for not replying to the legal notice is nothing else, but a moon shine plea and an outcome of after thought story. Rather, in such situation any prudent person would have sent a legal notice to the complainant to demand back his security cheques by stating all the relevant facts.
38.In the case of Iftikhar Alam v. Naved Hussian Kidwai, CRL.REV.P. 575/2011 decided on 21.12.2011, High Court of Delhi held that :-
"Further, admittedly, the legal notice that was issued by the respondent/complainant was also, admittedly, received by the petitioner. He neither replied the same nor controverted. It was unbelievable that if the contents of the legal notice were not correct, he would have remained quiet. Not only that, he did not even file any reply to the notice, he never chose to controvert the same at any point of time."
39.In the case of Rangappa v. Sri Mohan, 2010 (2) ACR 1841 (SC), Supreme Court held that :-
"Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version."
40.From all these conflicting scenario the natural inference has to be that accused no.2 had not been presenting true account of facts regarding the cheques being given as security on same date i.e. 04.06.2010.
41.Ld. counsel for appellant heavily relied upon testimony of DW1 and DW3 to submit that it is well proved by these two witnesses that DW1 was not present in Delhi on alleged date of transaction i.e. 20.10.2010, though CW1 had claimed that appellant along with all other accused persons had come to him. This claim of CW1 stands Page 22 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 falsified and it further goes on to falsify the case of complainant. Ld. counsel for complainant had made submissions that CW1 deposed what was represented to him by appellant and his companions.
42.CW1 had claimed that appellant along with other accused persons came to him and all of them claimed that they were partners in accused no.1 firm. Thus, the status of other accused persons was pleaded by complainant on the basis of such facts presented before CW1. CW1 never claimed that he personally knew all the accused persons and therefore, he could have stated only what was represented to him by appellant and his companions.
43.This may be either related to status of accused no.1 firm being a partnership firm and status of other companions of appellant as partner of that firm. Since this pleading or such deposition of CW1 was not based on personal relation of CW1 with other co-accused persons, I do not find something very much wrong with the testimony of CW1. It might be possible that DW1 did not go along with appellant and appellant was accompanied by some different persons, who introduced themselves in the name of DW1 and other co-accused persons. Therefore, I do not find such aspect to be so much significant so as to go into the roots of the case.
44.Ld. counsel for appellant further referred to different bills produced by CW1, out of the same bill book which contained bills in question. He pointed out consideration amount of those bills as well as absence of any TIN number or CST in other bills. He also argued vehemently that there was no acknowledgement of delivery of goods on the bills in question.
45.In respect of aforesaid plea of appellant, CW1 had given clarification that since cheque was given instantly, therefore, endorsement of cheque number was mentioned in the bills in question. I do not find any relevance of the bills in question having heavy consideration Page 23 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 amount as compared with other bills. As far as question of acknowledgement of appellant on bills in question is concerned, though ideally it should have been taken by the complainant, but omission of the same cannot have such effect so as to make the falsified defence of appellant as true one. In this respect, it is relevant to mention here that even appellant produced number of bills on the record, vide which he had purchased goods from different manufacturers. Some of the bills do mention name of complainant as agent, but there are some other bills also which do not refer complainant as the agent. Most importantly all these bills were though produced in original in one of the complaint cases, but contents of the same were not proved in accordance with law, because the contents of these bills could have been proved only by the relevant person who issued these bills. Still, these bills can be referred against the plea of appellant. Some of these bills do not refer to any transporter i.e. Ex.DW2/K (colly) and Ex.DW2/L (colly). Despite the fact that there is no mention of any transporter, still these bills do bear any acknowledgement of the purchaser i.e. the appellant. So, when vide these bills appellant claims to have purchased certain goods from different suppliers/manufacturer without giving any acknowledgement of any delivery of goods, then it is equally possible in the case of complainant's bill as well. Therefore, I do not find any significance of the arguments related to absence of any receipt of cash or acknowledgement on the bills.
46.Another argument was taken that so much of goods could not have been taken away in a car to Jaipur. However, CW-1 had nothing to do as to how appellant had taken away the goods to his place. He did not vouch that appellant had taken a car only and there was no arrangement of other vehicles made by appellant. Obviously, these were the facts within personal knowledge of appellant, so these Page 24 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 arguments cannot help the case of appellant.
47.Similarly, some ignorance shown by CW-1 regarding agent code given to the appellant is insignificant. CW-1 explained that he was not aware of any such code being given and such code might have been given by accounts department.
48.In the case of M.M.T.C. Ltd. & Anr. v. Medchl Chemicals & Pharma (P) Ltd. MANU/SC/0728/2001, Supreme Court held that :-
"The accused can thus show that the 'stop payment' instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 NI Act would not be made out. The important thing is that the burden of so proving would be on the accused....... "
49.Aforesaid case law makes it clear that appellant while giving instructions to stop payment, should have sufficient funds in his account and he should have established the reasons for giving such instructions. Appellant in his cross-examination admitted that he had given instructions to his banker to close the account only after dishounour of the cheques in question on account of insufficient funds. In these circumstances, once again, the act of appellant to close his accounts, but not opting to reply the legal notice of the complainant received in January 2011 becomes suspicious.
50.In view of my foregoing discussions, I find that the appellant could not discharge the burden of rebutting the presumption u/s 118 and 139 N.I. Act as the plea taken by him in his defence stood falsified on the record. Hence, I do not find any legal infirmity in the judgments passed by trial court, thereby convicting appellant for offence u/s 138 Page 25 of 26 (Pulastya Pramachala) Special Judge (PC Act) CBI, East District Karkardooma Courts, Delhi Criminal Appeal No.116/2017 & Criminal Appeal No.117/2017 N.I. Act. As far as sentence is concerned, I find that the conduct of appellant does not make him entitled for any lenient approach. He is not only guilty u/s 138 N.I. Act, but he is also guilty for breaching the norms of commercial transaction world. Therefore, the impugned judgments as well as orders on sentence are hereby upheld. Both the appeals are dismissed.
51.TCR along with copy of common judgment be sent back to the trial court. Copy of common judgment be given to the appellant free of cost.
File be consigned to record room, as per rules.
Digitally signed by PULASTYA PRAMACHALA PULASTYA Location: Court
PRAMACHALA No.3, Karkardooma
Courts, Delhi
Date: 2017.09.07
12:52:32 +0530
Announced in the open court (PULASTYA PRAMACHALA)
today on 06.09.2017 Special Judge (PC Act) CBI, East
(This order contains 26 pages) Karkardooma Courts, Delhi
Page 26 of 26 (Pulastya Pramachala)
Special Judge (PC Act) CBI, East District
Karkardooma Courts, Delhi