Delhi District Court
Page No. 1 Of 11 Ujala Pumps Pvt. Ltd. vs . Gur Prasad Electricals on 24 February, 2015
1
IN THE COURT OF VIDHI GUPTA,
METROPOLITAN MAGISTRATE (NI ACT) (EAST), KARKARDOOMA
COURTS:
SHAHDARA, DELHI.
JUDGMENT U/S 355 Cr.PC
a. Serial No. of the case : 1305/03
b. Date of the commission of the offence : 29/06/2003
c. Name of the Complainant : M/s Ujala Pumps Pvt. Ltd.
d. Name of Accused person and his parentage: M/s Gurprasad
and residence Electrical through its proprietor
Sh. Surjeet Singh,
S/o Late Sh. Malik Ram,
R/o H No. 333, Sector8,
Urban Estate, Karnal, Haryana.
e. Offence complained of : Dishonouring of cheque for
"Funds Insufficient".
f. Plea of the Accused and his examination (if any): Not guilty
because no goods was supplied
by the complainant and the cheque
was given as advance security cheque.
g. Final Order : Acquitted.
h. Order reserved on : 03.02.2015.
i. Order pronounced on : 24.02.2015.
Page No. 1 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals
2
Brief reasons for decision:
1. Brief facts necessary for the disposal of this case are that on
25.07.2003, a complaint was filed by the Ujala Pumps Pvt. Ltd. (hereinafter
referred to as the Complainant) under section 138 of the Negotiable Instruments
Act (NI Act) read with section 420 IPC against M/s Guprasad Electrical
(hereinafter referred to as the Accused no.1) and its proprietor Sh. Surjeet Singh
Suri (hereinafter referred to as the Accused no.2) whereby cognizance was taken
for the offence under section 138 of the NI Act and the Accused was summoned
before this Court.
2. It has been alleged in the Complaint (Ex. CW1/K) that for the purpose
of repaying the balance amount of goods supplied to the Accused persons and in
discharge of their liability, Accused no.2 issued cheque bearing number 126140
dated 12.05.2003 for an amount of Rs.2,06,010/ drawn on Central Bank of India,
Karnal, Haryana (Ex. CW1/C) which was delivered by the Accused persons to
the Complainant firm at their administrative office at 163, Patparganj Industrial
Area, Delhi110092. It is further stated that at the instructions of the Accused no.
2, the said cheque was presented for payment in its Bank by the Complainant
and the same was dishonoured with the remarks "Funds Insufficient" vide return
memo dated 30.05.2003 (Ex. CW1/D) which was received by the Complainant
vide Bank Slip dated 03.06.2003 (Ex. CW1/E). Thereafter, the Complainant got
legal notice dt. 13.06.2003 (Ex. CW1/F) issued upon the accused by Registered
Page No. 2 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals
3
Post as well as U.P.C. of which respective receipts are Ex. CW1/G1, Ex.
CW1/G2 and Ex. CW1/H. It is also stated that Registered A.D. post was returned
with the remarks "Refused" (Ex. CW1/J1 & Ex. CW1/J2). It is thereafter stated
the Accused intentionally issued the above cheque despite the knowledge that
the same will not be honoured and hence, the present complaint has been filed.
The Board Resolution in favour of the then Authorized Representative of the
Complainant, Sh Rajeev Kumar Gupta, is Ex.CW1/A and the Special Power of
Attorney executed in his favour is Ex.CW1/B.
3. Notice of accusation was served upon the accused no.2, being the
representative of Accused no.1, under Section 138 NI Act on 06.07.2004, to
which he pleaded not guilty and claimed trial.
4. To prove his case, the Complainant examined two witnesses i.e. the
AR of the Complainant as CW1 and CW2, Bank officer from Central Bank of
India. CW1 filed a copy of the ledger account of the Accused no.1 with the
Complainant i.e. Ex. CW1/K1, photocopy of certain invoices issued in the name
of the Accused no.1 which are Ex.CW1/K2 to Ex.CW1/K8 and a receipt MarkA.
Bank witness filed three documents on record i.e. Ex.CW2/A1 and A2 i.e.
certified copy of outward cheque returning register and Ex.CW2/B i.e. certified
copy of Statement of Account.
5. Another significant fact which needs to be noted herein is that the AR
of the Complainant has been substituted in this matter four times since the filing
of this case and at present fifth AR of the Complainant, substituted vide order
Page No. 3 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals
4
dated 23.08.2014, is representing the case of the Complainant. Further, for
appropriate appreciation of evidence it is also significant to note that the second
AR of the Complainant Sh. Pavnesh Mohan, substituted vide order dated
04.02.2008 had tendered his Affidavit in evidence and he had been cross
examined on various dates of hearing by the Counsel for the Accused; lastly on
21.05.2009 whereby further crossexamination was deferred want of certain
record to be brought by the Complainant. Thereafter, Sh. Pavnesh Mohan did not
appear before the Court and subsequently, other ARs were substituted for
representation of the Complainant Company in the present case. Despite several
opportunities being granted, the Complainant Company failed to secure presence
of Sh. Pavnesh Mohan before the Court for further crossexamination and after
being given one last opportunity for leading further evidence, Complainant's
Evidence was closed on 15.09.2014.
6. Statement of the accused had been recorded under Section 313
Cr.P.C on 23.09.2014, wherein the accused admitted to his signature on cheque
on question but denied filling in the contents thereon. He submitted that he had
handed over blank signed cheque in question to Sh. Naveen Kalra, Area
Manager of Complainant Company as advance as the Complainant Company
wanted to have business dealing with him. He further added that no goods were
however supplied by the Complainant Company to him and no business dealing
ever took place between them. He also stated that while he was waiting for
supply of goods, the Complainant Company presented the cheque in question for
Page No. 4 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals
5
payment in its Bank. Lastly, he denied receiving any legal demand notice issued
by the Complainant Company. Despite being given an opportunity, the Accused
preferred not to lead any evidence in his defence.
7. Thereafter, both the parties argued the matter at length in support of
their respective cases. Heard. Record perused.
8. Before proceeding further, it is hereby pertinent to peruse certain
relevant authorities on the issue of standard of proof required on the part of the
Complainant and the Accused in cases under section 138 of NI Act. It becomes
even more important to throw light on this issue herein as no evidence in his
defence has been led by the Accused. Moreover, since the signature on the
cheque in question as well as handing over of the same has already been
admitted by the Accused no.2, the presumptions under section 118 and 139 NI
Act arise against the Accused.
8.1. It has been held by the Hon'ble High Court of Delhi in case titled as
Birender Singh vs. State(NCT of Delhi) [2008 (1) JCC (NI) 15] that
5. There is no doubt that the burden rests on the accused to rebut
the presumption as raised under Sections 139 and 118 of the
Negotiable Instruments Act. However, this presumption can be
rebutted by the accused not merely by examining his own witnesses
but even by crossexamination of the complainant and his witnesses
and bringing out on record, through crossexamination, that the
complainant was a liar and there was no privity of contract between
the complainant and the accused and cheques were misused. It
must be kept in mind that once evidence is brought on record from
both the sides, it is evidence of the case and Court can draw
inference from the evidence in favor or against either of the parties.
Page No. 5 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals
6
Evidence is a complainant's evidence and accused's evidence for the
purpose of identifying it, but once it is adduced in the case, it is
evidence in the case and evidence has to be read as a whole. The
Court cannot read the evidence of the complainant only to the extent
it favors the complainant and overlook the rest of the evidence which
supports accused case on the ground that it is the complainant's
evidence. Similarly, from the evidence adduced by the accused, the
Court can draw inference in the favor of the complainant. The
accused has a right to argue his case even on the basis of
complainant's crossexamination and show to the Court that the
presumption in favor of the complainant stands rebutted from its own
evidence.
8.2. Also, as regards standard of proof required on the part of defence, it
has been held in the recent decision of the Hon'ble Supreme Court of India in
case titled as Vijay vs. Laxman & Anr.[(2013)3SCC 86] that:
We are not unmindful of the fact that there is a presumption that the
issue of a cheque is for consideration. Sections 118 and 139 of the
Negotiable Instruments Act make that abundantly clear. That
presumption is, however, rebuttable in nature. What is most important
is that the standard of proof required for rebutting any such
presumption is not as high as that required of the prosecution. So long
as the accused can make his version reasonably probable, the burden
of rebutting the presumption would stand discharged. Whether or not it
is so in a given case depends upon the facts and circumstances of that
case. It is trite that the courts can take into consideration the
circumstances appearing in the evidence to determine whether the
presumption should be held to be sufficiently rebutted.
8.3. In view of the above stated principles of law and the observations
give above, it is now to be examined whether the Accused has been able to rebut
the presumptions raised against him by questioning the sanctity of the case put
Page No. 6 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals
7
forth by the Complainant or not. Since, no evidence has been led by the
accused in his defence, the scrutiny of crossexamination of the AR for the
Complainant becomes all the more relevant here.
9. On perusal of the record, it is apparent from the Complaint as well as
the Affidavit of the AR examined on behalf of the Complainant that no details of
the transaction had been provided therein. Even though the transaction in
question pertained to supply of certain goods, no documents had been filed with
the Complaint verifying the delivery of goods by the Complainant to the Accused.
It is only during his postsummoning evidence that the AR for the Complainant
brought copies of certain invoices as well ledger account, as aforementioned in
paragraph4 above. On bare perusal of the Ex.CW1/K8 which is allegedly the bill
with respect to transaction in question, it is apparent that as the same is a
photocopy of the original neither the print thereon is clearly visible nor the
handwriting. However, it is undisputable that the said bill nowhere bears
signature of the Accused or any other written acknowledgment with respect to
receipt of the goods. On being compared from other bills on record it can be
made out that the Ex.CW1/K8 bears a handwritten endorsement whereby it is
mentioned that to be booked from Delhi through tpt. which at the maximum
signifies that the order was yet to be booked for delivery. As per the bill
Ex.CW1/K8, on the topright column under the head Despatched Through it has
been written Madhusudan Tpt. However, no transporter has been brought in the
witness box by the Complainant to testify regarding the delivery of goods. Also, it
Page No. 7 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals
8
is observed that as per Ex. CW1/K8, verbal order had been placed for the supply
of goods. As far as document MarkA is concerned it bears some endorsement
on its back bearing signature of some Netrapal Singh but nowhere does it prove
delivery of goods to the Accused. Moving further, it becomes essential at this
stage to analyze the crossexamination of the AR for the Complainant for
verifying the authenticity of Ex.CW1/K8.
10. The first contradiction which strikes at the very root of the complaint
case is the deposition regarding the delivery of cheque in question. While in its
complaint, the Complainant has stated that the cheque in question was delivered
by the Accused at the office of the Complainant Company in Delhi, in his cross
examination, the AR for the Complainant has pointed out towards the fact that
the Area Sales Manager of the Complainant Company had received the cheque
from the Accused whereby he has stated that The disputed cheque received by
my firm by hand. I cannot tell the name of the Area Sales Manager at that point
of time who received the cheque. It has also been stated by the AR during his
crossexamination voluntarily that As per the normal business practice Area
Sales Manager used to collect the cheques from the dealer or distributors and
used to sent it to the company. Hence, at the very outset, the complaint is
brought under grave suspicion.
11. The second observation which further deepens the doubts on the
Complainant's case is that despite the fact that the Area Sales Manager i.e. Sh.
Anil Mehra, who had allegedly received the cheque from the Accused was still
Page No. 8 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals
9
working in the Complainant Company, he was not produced as a witness in this
case. Testimony of area sales manager becomes relevant for this case on
account of the deposition of the AR for the Complainant Company whereby it has
been stated by him that:
It is further correct that I cannot tell about the particulars of
the cheque received by the area sales manager from the
accused persons on dt. i.e.10.05.03. I have no knowledge
but the area sales manager can better explain. (cross
examination dt.04.08.2008)
.........................
The Area Sales Manager who brought the order from the accused person is still in service and his name is Anil Mehra. (crossexamination dt.03.09.2008)
12. The third observation which dents the case of the Complainant again emanates from the crossexamination of the dated 03.09.2008 whereby it has been stated by the AR for the Complainant that:
It is wrong to suggest that the cheque in question was received by the Area Sales Manager blank. The cheque was received by the Area Sales Manager alongwith order.
It again contradicts the averment in the complaint that the cheque was issued for the purpose of repaying the balance amount of goods supplied to the Accused. Further, since the order was verbal and as per the testimony of the AR, the cheque was received alongwith the order, it implies that the cheque was issued before delivery of goods which further crystallizes the averment of the Page No. 9 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals 10 Accused in his statement under section 313 Cr.P.C. that the cheque was issued as advance for the purpose of business dealing.
13. At this stage, it is crucial to peruse the recent leading judgment of the Hon'ble Apex Court with respect to advance payment and whether it can be taken to be a legally dischargeable liability or not. It has been held by the Hon'ble Supreme Court of India in matter titled as Indus Airways P. Ltd. vs. Magnum Aviation P. Ltd. [2014 (4) SCALE 645] that:
13. The explanation appended to Section 138 explains the meaning of the expression 'debt or other liability' for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138. If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an exiting debt or liability. The payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability.
In view of the law enunciated above and the facts of the present case, even the liability against which the cheque seems to have been issued appears to be non est.
14. In view of the facts and circumstances of the case, the detailed analysis of evidence available on record and the applicable principles of law, it is Page No. 10 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals 11 apparent that even without leading any evidence in this case, the defence has brought out serious discrepancies in the case of the Complainant leaving it damaged beyond repairs. What has further made the legitimacy of this case questionable is the lackadaisical attitude of the Complainant Company towards the Court proceedings in this case whereby as many as five ARs were brought to represent this case in a span of more than a decade. The AR who was cross examined in part, never bothered to appear again after 21.05.2009 and thereafter, despite being given sufficient opportunities the Complainant Company did not lead any further evidence. In these circumstances, this court has no hesitation in holding that the presumptions in law as under NI Act have been successfully rebutted by the Accused herein and the merits of this case mandate the freedom of Accused from the pending complaint case.
15. Therefore, the Accused is hereby acquitted of the offence under section 138 of NI Act and he is hereby directed to furnish fresh Bail Bond in the sum of Rs. 20,000/ with one surety in the like amount in terms of section 437A of Cr.P.C..
Announced in the open court (VIDHI GUPTA)
on 24th Day of February, 2015. MM/KKD/Delhi
This judgment contains 11 signed pages.
Page No. 11 of 11 Ujala Pumps Pvt. Ltd. Vs. Gur Prasad Electricals