Delhi District Court
Have Been Laid Down In Jugesh Sehgal vs . Shamsher Singh Gogi 2009 (9) on 16 October, 2019
IN THE COURT OF SH. ASHOK KUMAR,
METROPOLITAN MAGISTRATE5 (NI ACT)
SOUTH EAST, SAKET, NEW DELHI
CC No. 637007/16
U/S 138 NI Act
Dheeraj Rajpal,
S/o Late Sh. Gopal Rajpal,
Proprietor of
M/s Raghav Apparels,
TA93, Second Floor,
Tughlakabad Extension,
New Delhi110019 .......................Complainant
Versus
Hari Narayan Singh,
S/o Sh. Baldev Singh,
Proprietor of M/s Singh Garments,
A198 Main Market,
Beribagh, Alli Village,
Sarita Vihar,New Delhi110076
Also at:
R/o H.No. D19L,
Alli Vihar, Sarita Vihar,
New Deli 110076 .........................Accused.
Offence Complaint of or proved. : Section 138 of Negotiable
Instrument Act.
Plea of accused : Pleaded not guilty
Date of Institution : 19.11.2016
Date of Reserving order : 16.10.2019
Final order : Convicted
Date of pronouncement : 16.10.2019
C.C. No. 637007/16 Page1of 10
JUDGMENT
FACTS OF THE CASE The facts of the case as per the complaint are that the accused in discharge of liability towards the goods/garments supplied by complainant issued the cheques in question bearing No. 057889 and 057891, dated 02.09.2016 and 15.09.2016 of Rs. 2,21,740/ and 3,00,000/ both drawn on Corporation Bank, Alli Branch, New Delhi in favour of the complainant which upon presentation got dishonoured for the reason " Insufficient Funds" and even after the expiry of statutory period of 15 days of service of legal notice dated 06.10.2016 did not pay the cheque amount.
TRIAL PROCEEDINGS 2 Thereafter, the complainant filed the complaint under Sec. 138 NI Act after the accused failed to make the payment within 15 days of the receipt of legal notice. On the said facts, the accused was summoned and notice under Sec. 138 NI Act was framed against the accused to which he pleaded not guilty and claimed trial. Thereafter, case was fixed for complainant evidence. In support of present case, complainant was examined as CW1 and vide order dated 13.08.2018, CE was closed. Statement of accused was recorded and accused preferred to lead evidence in defence and examined himself as DW1. Thereafter, final arguments were heard. The following documents were relied by the complainant in her evidence :
3 Complainant proved the following documents in his presummoning evidence : i The cheques in question are Ex. CW1/B&C. ii The bank returning memos are Ex. CW1/D&E. C.C. No. 637007/16 Page2of 10 iii The legal notice and postal receipts, Courier receipt and tracking reports Ex. CW1/F to Ex. CW1/L. iv The Affidavit in evidence of complainant is Ex. N. v The complaint and bills/invoices regarding receipt of goods are Ex. CW1/M and Ex. CW1/A(Colly).
Relevant Law 4 The ingredients to prove the commission of offence under Sec. 138 NI Act have been laid down in Jugesh Sehgal Vs. Shamsher Singh Gogi 2009 (9) SCALE 455. The relevant portion of the said judgment reads as under:
"9. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the C.C. No. 637007/16 Page3of 10 drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice"
Presumption in favour of the 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.
Further, explanation to section 138 of the ActFor the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
On service of legal notice in cases under NI Act In this respect it has been provided in the case titled as C.C. Alavi Haji Vs Palapetty Muhammed and Anothers (2007) 6 SCC 555 that the entire purpose of service of legal notice to the accused under Sec. 138 NI Act is to give an opportunity to the drawer to pay the cheque amount within 15 days of the service of legal notice and thereby free himself from the penal consequences. It conceives cases where a wellintentioned drawer may not have made necessary arrangements for reasons beyond his control to honour the cheque drawn by him and hence this opportunity has been provided. Hence, this provision is meant to protect honest drawers whose cheque may have been dishonoured for the fault of others or who may have genuinely wanted to fulfill their promise but on account of inadvertence or negligence failed to make necessary arrangements for the C.C. No. 637007/16 Page4of 10 payment of the cheque. Hence, any honest drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Sec. 138 NI Act, make payment of the cheuqe amount and submit to the court that he has made payment within 15 days of receipt of summons (by receiving a copy of the plaint with the summons) and, therefore, the complaint is liable to be rejected. Where a legal notice is sent under registered cover with proper address and stamp and sent along with the summons and complaint, then if it is contended that legal notice was not received only with a view to cheat the complainant, and such offer of payment was not made within 15 days of receipt of summons, then such dishonest drawer can not contend improper service of the notice by virtue of applicability of presumption under Sec. 27 GC Act and 114 Evidence Act.
5 ARGUMENTS HEARD AND DEALT WITH I have heard the submissions of both the Ld. Counsel for the complainant as well as the accused.
6 Let us now examine whether the complainant has proved the necessary ingredients of the offence under Section 138 of the Act or not. 6.1 The first ingredient of the offence stands proved as original cheques placed on record as Ex. CW1/B&C and issuance of same is admitted by the accused in statement recorded u/s 313 Cr.PC.. It is settled law that a signed cheque by the account holder is a complete instrument and the rest of the portions of the cheque can be filled by the complainant. Hence the first ingredient stands proved against the accused.
6.2 The second ingredient of the offence is that the cheque must have been issued in discharge of legal liability. As the signatures on the cheque are C.C. No. 637007/16 Page5of 10 admitted, the presumptions raised under Section 139 of the Act become applicable and the issuance of cheque in discharge of the legal liability stands proved. The law on this point has been succinctly laid down by the Hon'ble Apex Court in Rangappa v. Sri Mohan AIR 2010 SC 1898.
In view of the aforesaid law, the presumption under Sec. 139 NI Act works in favour of the complainant once he files the necessary documents like the dishonored cheques, returning memo, legal notice and delivery proof and avers that the cheques were issued for legally enforceable debt or liability which the accused has failed to pay despite expiry of 15 days of the delivery of legal notice. In the present case the complainant has led his evidence by way of affidavit and after framing of notice the case was adjourned for CE. In the present case the complainant not only has the presumption u/s 138 NI Act read with Section 139 NI Act in his favour of having been issued both the cheques in view of legally enforceable debt or liability but also Ex. CW1/A (Colly) which were the two invoices raised upon the accused and duly acknowledged by the accused by affixing his signatures on the same. The accused has not denied the signatures. However, the accused has raised the defence that the acknowledgement was in advance but the goods were not delivered to him. In the same breath the accused states that the goods were of defective quality but could not prove how they were of defective quality. The accused has taken this defence in the cross examination of the complainant as well as in the statement of accused under 313 Cr.PC. This self contradictory defence itself strengthens the case of the complainant and presumption can be drawn that valid consideration exists because the complainant delivered the goods , issued the invoices which were duly acknowledged by the accused and that is why the accused issued the cheques in question and which C.C. No. 637007/16 Page6of 10 were subsequently dishonoured. Further counsel for the accused has relied upon certain provisions of the Sale of Goods Act1930 ( hereinafter referred to as the Act) to show that the property in the goods had not passed on to the accused at the time of issuance of the cheque and that is why he is not liable to pay on the cheques in question. Section 4 the Act provides that a contract of sale of goods may consists of a sale or an agreement to sell. When property in the goods transfers from seller to buyer immediately it is called a sale and where transfers of the property in the goods is to take place in future it is called agreement to sell. Future goods are defined in Section 2(6) of the Act as per which if the goods are to be manufactured or produced or acquired in the future after making the contract of sale, they are future goods. Further as per Section 18 of the Act property in the goods cannot transfer unless or until the goods are ascertained. Hence as per the defence counsel, if the goods have not been manufactured or are not ready to be delivered, they are not ascertained and are future goods and hence, the property in such goods cannot transfer from the seller to the buyer. In short if the property do not exist at the time of issuance of cheques, there is no valid consideration and hence there is no liability to pay on the cheques in question. Ld. Counsel has drawn my attention towards first invoice among the two invoices forming Ex. CW1/A (Colly). Ld. Counsel submits that it is the admitted case of the complainant in the cross examination that the cheque amount of Rs, 2,21,740/ is more than the invoice amount of Rs. 1,48,500/ which invoice is dated 02.07.2016 and hence the amount is not payable. As per settled law where it is proved that more amount than actually due has been claimed in the cheque, the case u/s 138 NI Act is not maintainable. Also the accused has returned the goods when they were supplied by the complainant which were defective in C.C. No. 637007/16 Page7of 10 description and quality and so there is no liability on the cheques in question.
I do not agree with the submissions of the counsel because every case has to be seen in its own facts and circumstances. As per Section 5 (1) of the Act a contract of sale may provide for immediate delivery of the goods or immediate payment of the price or both or for delivery or payment for installment or that the delivery or payment or both may be postponed. Hence, it is not necessary for contract of sale the goods should exists at the date of contract and payment of price may be in advance. Further, as per Section 55(2) of the Act where under a contract of sale a price is payable on a certain day irrespective of delivery and the buyer wrongly neglects or refuses to pay the price, the seller may sue for the price of goods even though the property in the goods has not passed and the goods have not been appropriated to the contract. Hence, it is clear from the conjoint reading of these Sections that the purchaser/accused may be liable to pay the price even though there is no immediate delivery of the goods and the goods have not been appropriated to the contract. In the present case the complainant has given complete explanation that the cheque amount is more than the invoice amount because the ordered quantity of garments was not ready at the time of issuance of the cheques and the said amount was adjusted in the second cheque in question of Rs. 3 lakh. The said statement of the complainant finds mention in his cross examination dated 13.08.2018 as " At the time of first visit, when the first invoice dated 02.07.2016 for Rs. 1,48,500/ was issued by me against the accused, the accused had issued the first cheque bearing no. 057889 for Rs. 2,21,740/. The cheque amount was more than the invoice amount because the ordered quantity of garments which was placed by the accused was not ready at that time and as the accused had brought the cheque with the C.C. No. 637007/16 Page8of 10 amount already filled in. At that time the accused had placed order for further manufacturing of garments where after in his second visit he issued the second cheque bearing no. 057891 for Rs. 3 lakh and the amount was adjusted. The ordered goods were duly suplied to the accused". So even if the goods were not ready to be delivered at the time of issuance of the cheque amounting to Rs. 2,21,740/ Ex. CW1/B, the accused is still liable to pay for the same. It is pertinent to mention that the contract may be expressed or implied. It is also worthwhile to mention that the accused has nowhere proved that he has returned the goods and mere oral submission in this regard will be of no help, Hence, it can be concluded that the presumption u/s 139 NI Act that the cheque was issued in consideration of legally enforceable debt or liability has not been rebutted by the accused. Hence this ingredient stands proved.
6.3 The third ingredient of the offence is that cheque must be presented to the bank within a period of three months from the date mentioned on it. The cheque are Ex. CW1/B&C and which were returned back unpaid on 20.09.2016 and cheques are dated 02.09.2016 and 15.09.2016. So it is evident that same were presented for payment within the statutory period of three months. 6.4 The fourth ingredient of the offence is that the cheque(s) must be returned unpaid. The cheques were returned unpaid for the reason " Insufficient Funds". The original bank returnmemos are Ex. CW1/D&E placed on record proves dishonour of cheque by virtue of presumption raised under Section 146 of the Act and during the trial Ex. CW1/D&E went uncontroverted.
6.5 The fifth ingredient of the offence is that the demand notice must be issued to the accused within 30 days of the intimation of dishonour of cheque and C.C. No. 637007/16 Page9of 10 same be served upon the accused. The accused has denied receipt of legal notice in his defence plesa u/s 251 Cr.P.C and his statement u/ 313 CrPC. In view of Judgment of C.C. Alavi Haji (Supra) this point can not be raised any more by the accused. If the accused had not received the legal notice, then he could have offered the payment within 15 days from the receipt of the summons in view of my aforesaid findings in the second ingredient that cheque was issued in discharge of legal liability. Hence, this ingredient also stand proved. 6.6 The last ingredient is that the accused must not have made the payment of the cheque amount within fifteen days of the receipt of legal notice. It is clear that the accused did not make the payment within 15 days and that is why the complainant has filed the case.
7 In view of the foregoing discussion it is proved that the cheques were presented against a legally recoverable liability in favour of the complainant and the cheques got dishonoured for reason of " Insufficient Funds" the chequeswere drawn and issued on account of the accused and for which payment was not made within the period of 15 days of the receipt of legal notice. DECISION
8. In view of the above discussion, the accused is convicted for the offence under Sec. 138 NI Act. Let accused be separately heard on the point of sentence.
ASHOK Digitally signed by ASHOK
KUMAR
KUMAR Date: 2019.10.16 16:48:38
+0530
Announced in the open (ASHOK KUMAR)
court on 16.10.2019 MM05 (NI Act)SE/Saket/ New Delhi
C.C. No. 637007/16 Page10of 10