Delhi District Court
Complainant vs Mohd. Yunus on 26 March, 2014
IN THE COURT OF SH. APOORV SARVARIA, CIVIL JUDGEI, NEW
DELHI DISTRICT, NEW DELHI
C.C. No: 284/12
Unique Case ID No.02403R0093312012
Jing Cheng India
Division of M/s. Charu Home Products Pvt. Ltd.
12, School Lane,
New Delhi110001.
Through: Authorised Representative
Sh. Ashok Tyagi
..... Complainant
Versus
Mohd. Yunus
Prop. of M/s. Universe Fabrics
B18/139D, Revari Tablab,
Varanasi.
....... Accused
COMPLAINT UNDER SECTION 138 OF THE
NEGOTIABLE INSTRUMENTS ACT, 1881
Date of Institution: 23.09.2006
Date of Reserving Order: 01.03.2014
Date of Judgment: 26.03.2014
JUDGMENT
Brief facts
1. The brief facts of the present complaint filed U/s. 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") are that the complainant Jing Cheng India is a private limited company having its registered office at 12, School Lane, New Delhi110001.
CC No. 284/12 Jing Cheng India v. Mohd. Yunus Page 1 of 72. The accused Sh. Md. Yunus, proprietor of M/s. Universe Fabrics is stated to have purchased goods/computerized machinery from the complainant and in discharge of his liability, the accused issued three cheques bearing nos. 433786 dated 05.05.2006 for Rs. 1,00,000/, no. 433787 dated 10.06.2006 for Rs. 1,00,000/ and no. 433788 dated 15.07.2006 for Rs. 1,00,000/ all drawn on Bombay Mercantile Cooperative. Bank Ltd. Varanasi Branch. The complainant presented the said cheques but the same were returned unpaid with remarks "funds insufficient" as per the return memos dated 01.08.2006 and 11.08.2006. Thereafter, the complainant issued two separate legal notices dated 17.08.2006 pertaining to cheque no. 433786 through registered AD and UPC and another legal notice dated 23.08.2006 pertaining to cheque no. 433787 and 433788 through UPC and registered AD. It is stated that despite service of the legal notices accused did not make the payment of the cheque amount within the prescribed period. Therefore, it is stated that the accused is liable for the commission of the offence U/s. 138 of the NI Act.
Proceedings Before Court
3. The present complaint was received by way of assignment on 25.09.2006.
Summons were issued against the accused. The accused entered appearance and took bail and notice of accusation was framed against the accused on 12.08.2008 to which accused pleaded not guilty and claimed trial.
4. In support of its case, the complainant produced CW1 Sh. Ashok Tyagi who tendered his evidence by way of affidavit Ex.CW1/1 and relied on documents Ex.CW1/A to Ex.CW1/G. Thereafter, CW1 was crossexamined after which the complainant closed its evidence.
5. During examination conducted U/s. 313 Cr.P.C, the accused stated that he did not approach the complainant and the complainant had approached him for CC No. 284/12 Jing Cheng India v. Mohd. Yunus Page 2 of 7 purchase of their embroidery machines. He further stated that he had purchased two machines and the value of those two machines was Rs. 8,00,000/. He further stated that he had issued the three cheques in question as they were the part of seven cheques issued by him. He further stated that the three cheques in question were not issued in discharge of any liability and they were issued to the complainant as security. He further stated that he had paid Rs. 9 lacs by way of demand drafts to the complainant. He further stated that he had received legal notice and duly replied to the same.
6. In support of his defence, accused produced himself as DW1 and was examinedinchief and he relied upon the documents Ex.DW1/1 to Ex. DW1/10 and also Mark A to Mark C and thereafter, DW1 Sh. Mohd. Yunus was cross examined.
7. This court has heard Sh. V K Sharma, Ld. Advocate for complainant and Sh. J S Arora, Ld. Advocate for the accused and perused the record.
Findings
8. The signatures on three cheques bearing nos. 433786 dated 05.05.2006 for Rs.
1,00,000/ Ex.CW1/C1, no. 433787 dated 10.06.2006 for Rs. 1,00,000/ Ex.CW1/C2 and no. 433788 dated 15.07.2006 for Rs. 1,00,000/ Ex.CW1/C3 all drawn on Bombay Mercantile Copo. Bank Ltd. Varanasi Branch are admitted and, therefore, the execution of the cheques is not disputed. Hence, presumption U/s.139 of the NI Act is raised.
9. In Rangappa v. Sri Mohan AIR 2010 SC 1898 it was observed by the Hon'ble Supreme Court as under :
"14. In light of these extracts, we are in agreement with the respondentclaimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the CC No. 284/12 Jing Cheng India v. Mohd. Yunus Page 3 of 7 impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the 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. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, 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, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. " (emphasis added)
10.In view of the decision in Rangappa laid down by the Supreme Court, the presumption raised under Section 139 of the NI Act is of legally enforceable CC No. 284/12 Jing Cheng India v. Mohd. Yunus Page 4 of 7 debt or liability and it is for the accused to raise a probable defence to rebut the said presumption.
11. The defence of the accused has been that these cheques were part of the seven cheques issued by him to the complainant as security. He has also raised a defence that he had purchased two machines of total value of Rs. 8 lacs and the amount of Rs. 9 lacs by way of demand draft was already paid by him to the complainant.
12.In support of his defence, the accused produced himself in the witness box and examined himself as DW1 and deposed that the complainant's representative Sh. D M Tripathi and Sh. Vikram Krishna approached him for supply of two new embroidery machines. He further stated that an order was obtained by the complainant vide order dated 12.12.2005 describing the value of goods of Rs. 8 lacs against the two new machines and he had paid Rs. 3.50 lacs in cash for the proposed delivery of the machine and the cash was received by Sh. D M Tripathi being authorised signatory of the complainant. He further stated that in addition to the above cash, he had also given seven post dated cheques of Rs. 1 lac each as security to the complainant for proposed supply and the abovesaid cheques of Rs. 7 lacs included the cost of finance charges if the finance is arranged by the complainant. He further stated that a demand draft bearing no. 000404 dated 17.01.2006 drawn on Kashigramin Bank for Rs. 9 lacs was handed over to the complainant through its authorised signatory Sh. D M Tripathi at Varanasi, which has been encashed by the complainant towards proposed supply and the said Rs. 9 lacs were arranged by him as a loan from his bank and the same was repaid by him vide NOC dated 31.08.2007 and thereafter he had received the delivery of two second hand machines vide complainant's invoice cum challan no. 0181 dated 18.01.2006 supported with statutory form no. 32 duly endorsed by the Sales Tax Authorities showing the CC No. 284/12 Jing Cheng India v. Mohd. Yunus Page 5 of 7 total value of the goods of Rs. 8 lacs filled up and signed and stamped by the complainant vide endorsement dated 23.01.2006. He further stated that the delivery of the said two machines was received by him thorugh the transporter LR No. 649 dated 20.01.2006 which also shows the number of thte sales tax form (Form No. 32) and also shows the challan number as stated above and the value of the goods of Rs. 8 lacs being supplied to him vide LR issued by KK Logistics and the said LR is also endorsed by the Sales Tax Authorities. He further deposed that he issued letter to the complainant to return all the post dated cheques but the complainant encashed one of the sevem cheques bearing no. 433785 for Rs. 1 lac. The complainant also presented other cheques though the accused had requested to return the cheques as the payment had already been made. Thereafter, as the complainant failed to return the cheque and encashed Rs. 3.50 lacs even after repeated requests, the accused filed criminal complaint U/s. 419/420/506 IPC against Sh. D M Tripathi & Ors. & Ors before the Court of Ld. Additional Chief Judicial Magistrate, Varanasi. The testimony of the DW1 is supported by the order dated 12.12.2005 Ex.DW1/1 which shows the total rate of the two machines as Rs. 8 lacs. DW1 has also produced receipt of Rs. 3.50 lacs dated 12.12.2005 Ex.DW1/2 issued on behalf of hte complainant. Copy of the demand draft of Rs. 9 lacs dated 17.01.2006 Mark A has also been produced which shows the receiving made by Sh. D M Tripathi on behalf of the complainant. DW1 has also produced Form No. 32 Ex.DW1/4 which shows the value of the machines as Rs. 8 lacs. DW1 has also produced challan dated 18.01.2006 stating the value of the two machines as Rs. 8 lacs Ex.DW1/5, transport receipt Ex.DW1/6 is also relied upon. Accused has also relied upon reply dated 02.08.2006 Ex.DW1/7, dated 26.08.2006 Ex.DW1/8 as well as reply dated 01.09.2006 Ex.DW1/9. The documents relied upon by the accused show that the two machines were sold to the accused for Rs. 8 lacs CC No. 284/12 Jing Cheng India v. Mohd. Yunus Page 6 of 7 only and not Rs. 16 lacs. Therefore, the accused has been able to raise a probable defence that the cheques in question are part of the security cheques given to the complainant for making payment and the accused has been able to show that he has made the payment of the amount of Rs. 8 lacs, infact more than that, to the complainant. Therefore, accused has rebutted the presumption raised under Section 139 of the NI Act.
13.Since the accused has rebutted the presumption raised U/s. 139 of the NI Act, the onus shifts on the complainant to prove beyond reasonable doubt the liability of the accused. (See Pine Product Industries v. R P Gupta 2007(94) DRJ 352).
14. However, the complainant has not brought on record any material to show that the price of the two machines was Rs. 16 lacs. Therefore, the complainant has failed to prove its case beyond reasonable doubt. Hence, the court finds that the cheques in question were not issued in discharge of any liability and were merely issued as security. No offence is made out. Complaint is dismissed. Accused is acquitted. Bail bonds stands cancelled. Surety is discharged subject to Section 437A Cr.P.C. File be consigned to record room. Judgment be uploaded to www.delhidistrictcourts.nic.in.
Announced in the Open Court (Apoorv Sarvaria)
on 26th March, 2014 Civil JudgeI/MM, New Delhi District
New Delhi
CC No. 284/12
Jing Cheng India v. Mohd. Yunus Page 7 of 7