Delhi District Court
Sandeep Sehgal S/O Sh. Op Sehgal vs Sh. Abdul Moin on 25 August, 2018
IN THE COURT OF SURESH KUMAR GUPTA
ADDITIONAL SESSIONS JUDGE04
& SPECIAL JUDGE (NDPS) SOUTHEAST: SAKET COURTS: NEW DELHI
CA 204373 of 2016 in CA 212 of 2015
Sandeep Sehgal S/o Sh. OP Sehgal
R/o 8/19, Ground Floor, WEA
Pusa Lane, Karol Bagh,
New Delhi - 110005 .....Appellant
Versus
Sh. Abdul Moin
S/o Sh. Abdul Mobin
R/o Pink House, A21,
Nizamuddin West
New Delhi110013 ....... Respondent
Instituted on: 06.11.2015
Argues on : 14.08.2018
Decided on : 25.08.2018
JUDGMENT
1 The appellant has impugned the judgment dated 03.10.2015 vide which he has been convicted U/s 138 Negotiable Instruments Act (hereinafter referred to as Act) and order on sentence dated 08.10.2015 vide which he is sentenced to undergo SI for 1 year with compensation of Rs.41 Lacs to the respondent and in default of payment of compensation to undergo SI for six months. CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.1 / 16 2 The appeal is filed on the grounds that cheque has been issued in the name of the respondent whereas forged bill showing the alleged purchase of bill is issued by Jaipur Gem Palace. Jaipur Gem Palace has submitted original VAT returns for first quarter of 2013 on 24.07.2013 and revised the return on 16.08.2014. A personal cheque cannot be counted as turn over of the firm. VAT cannot be deposited any transaction based upon the personal cheque. The respondent and firm are two different entities. The cheque in favour of respondent cannot be presumed to be a cheque in favour of the firm. Section 13(a) of Partnership Act, 1932, a partner was not entitled to receive remuneration for taking part in the conduct of the business and the Ld. Trial Court had failed to appreciate that the respondent was neither the "holder" nor the "holder in due course"
in the said transaction. The Ld. MM had also failed to appreciate the appellant had been able to rebut the presumption as available to him under sections 118 and 139 of Act, especially when the transaction was forbidden by the law and the consideration was unlawful.
3 Notice of the appeal is given to the respondent. 4 The facts of the case are like this. The respondent has CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.2 / 16 filed a complaint u/s 138 of the Act against the appellant with the averments that he is running a jewelery shop under the name and style of Jaipur Gem Palace. On 23.06.2013 the appellant has approached him for the purchase of diamond ring of Rs.3506720/. The value of the ring after discount comes to Rs.35 Lac out of which a sum of Rs. 1 Lac was paid in cash and a cheque bearing no. 085244 dated 24.06.2013 of Rs.34 Lacs drawn on HDFC Bank, C. R. Park, New Delhi in his favour were given by the appellant. A bill/invoice no. 46SFT No. 4508 dated 23.06.2013 was issued. The said cheque on presentation to the bank was dishonored with the remarks insufficient funds vide memo dated 27.06.2013. A legal notice dated 03.07.2013 was sent by registered post to the appellant to clear the dues but the appellant has not clear the dues despite the service of notice. Hence, this complaint.
5 The appellant was summoned u/s 138 of the Act after recording presummoning evidence.
6 Notice of accusation for offence u/s 138 of the Act was put to the appellant. The respondent has examined himself as CW1. The evidence of the respondent was closed. The appellant was CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.3 / 16 examined u/s 313 Cr.PC. He has taken the plea that he has not purchased the ring from the respondent. He has given the cheque in question to the respondent for the payment of commission of a deal pertaining to a sale of airlines. The said deal did not mature. He is not liable to pay cheque amount to the respondent. The cash of Rs. 1 Lac was not given by him to the respondent. The cheque has been misused. He has examined one witness in defence evidence. 7 Ld. Trial Court after hearing the Ld. Counsel for the parties and perusing the record has convicted and sentenced the appellant.
8 The respondent has examined himself as CW1. He has filed his affidavit Ex.CW1/1 in the examination in chief wherein he has corroborated the version of complaint as set out in the beginning while briefing the facts. Ex.CW1/A is cheque bearing no. 085244 of Rs.34 Lac drawn in the favour of respondent, Ex.CW1/B is the invoice/cash memo/bill of Rs. 35 Lac issued by Jaipur Gem Palace in favour of appellant, Ex.CW1/C is cheque returning memo, Ex. PWC/D is the legal notice dated 03.07.2013, Ex.CW1/E is the postal receipt and Ex.CW1/F is the reply to the legal notice. During cross CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.4 / 16 examination, he stated that the appellant met him in a function. The appellant has called him on telephone and told that he wants to buy a solitaire diamond ring. In June, 2013 he has brought the ring at the officecumresidence i.e. A21, Nizamuddin West. The price of the ring was fixed as Rs. 35 Lacs after the discount. On 23.06.2013 the ring was delivered upon which appellant has paid Rs. 1 Lac in cash and a cheque of Rs. 34 Lac was given. The ring is still with the appellant. 1% VAT is charged on the transaction. He is managing partner of Jaipur Gem Palace. The appellant has never spoken to him about Indus Airways. He have no knowledge whether appellant has sent any email to him about Indus Airways. He has no connection with Pawan Hans or Air India. He has not discussed about the Indus Airways with the appellant.
9 The appellant has led defence evidence.
10 DW1 Rajender Kumar Chadha stated that he is Accountant in M/s. Jaipur Gem Palace. He has brought the original Bill Book. The Bill No. 4508 booked No. 46 dated 23.06.2013 is Ex.DW1/1. The quarterly VAT return for 201314 is Ex.DW1/2. M/s. Jaipur Gem Palace has sold his product through invoices. The CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.5 / 16 firm has two shops out of which one is at A21, Nizamuddin and other is at 21, Le Maridian Hotel. He does not remember whether M/s. Jaipur Gem Palace used to receive the cheque in the individual name for sale on behalf of the firm. He has no personal knowledge about the invoice Ex.DW1/1. The firm has shown his turn over of 201314 in the Income Tax Return.
11 Ld. Counsel for the appellant submitted that he has not purchased any ring from the respondent. He further submitted that the bill/invoice has been forged by the respondent. He further submitted that the cheque in the name of the respondent cannot be shown in the account and turn over of Jaipur Gem Palace. He further submitted that the cheque in question was issued as a commission for the payment of a deal pertaining to the sale of Indus Airways. 12 Ld. Counsel for the respondent submitted that he is running the business of diamond under the name and style of M/s Jaipur Gem Palace. He further submitted that the appellant has purchased the solitaire diamond ring from him and thereafter issued the cheque in question after making a payment of Rs. 1 lac in cash. He further submitted that he does not know anything about Indus CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.6 / 16 Airways and question of issuing the cheques as a commission for the sale of Indus Airways does not arise.
13 Heard and perused the record.
14 In order appreciate the submissions of the Ld. Counsel for the parties it is desirable to go through the relevant provisions.
118. Presumption as to negotiable instruments. Until the contrary is proved, the following presumptions shall be made :
(a) of consideration : that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;
138. Dishonour of cheque for insufficiency, etc., of funds in the account. where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that 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 that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.7 / 16 imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless
i) the 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.
ii) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and iii), the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation. For the purposes of this section, 'debt or other liability' means a legally enforceable debt or other liability.
139. Presumption in favour of holder. It shall be presumed, unless the contrary is proved, that the holder of a cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt, or other liability.
13. Ordinary in cheque bouncing cases, what the courts have to consider is whether the ingredients of the offence enumerated in Section 138 of the Act have been met and if so, whether the accused was CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.8 / 16 able to rebut the statutory presumption contemplated by Section 139 of the Act.
In K. N. Beena v. Muniyappan, 2001 (2) ALD (Crl.) 824 the Supreme Court observed that it would be erroneous approach in case the burden is cast on the prosecution/complainant to prove that the cheque was issued for a debt or liability. The Supreme Court further observed that the accused had to prove in the trial by leading cogent evidence that there was no debt or liability and that the accused not having lead any evidence could not be said to have discharged the burden cast on him. In Rangappa v. Mohan, AIR 2010 SC 1898 also the Supreme Court held that existence of legally recoverable debt or liability is a matter of presumption under Section 139 of the Act.
15 The presumption u/s 139 of the Act is a rebuttal presumption and the standard of proof required to rebut the said presumption is on the preponderance of probability. 16 The appellant is supposed to disclose his defence at the time when notice of accusation is framed as observed in Rajesh Aggarwal Vs. Y. K. Goel, 2010 VII AD (DELHI) 57 became offence u/s 138 of the Act is a document based offence. It was further held by their Lordship that there is no presumption that even if an accused fails bring out his defence, he still to be considered CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.9 / 16 innocent. If an accused has a defene against dishonour of cheque in question, it is he alone who knows the defence and responsibility of spelling out his defence to the Court and then proving his defence is on the accused.
17 The appellant has taken the defence at the time of framing NOA u/s 251 Cr.PC to the effect that cheque was given as a security according to the agreement for the purchase of air line with the services of the respondent. The deal was not finalized. The same explanation is furnished while recording the statement u/s 313 Cr.PC. He has not purchased the ring from the respondent and did not give Rs. 1 lac in cash.
18 The respondent has given a notice Ex.CW1/D dated 3.7.2013 to the appellant regarding dishonour of cheque in question with the directions to clear the dues by post regarding which reply Ex. CW1/F was given by the appellant.
19 The testimony of CW1 clearly shows that appellant has purchased solitaire diamond ring of Rs. 35Lac from M/s Jaipur Gem Palace and bill Ex. CW1/B was issued. The appellant has paid a sum of Rs. 1 lac in cash and issued cheque Ex. CW1/A of the remaining CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.10 / 16 amount. The said cheque on presentation to the bank of was dishonoured with the remarks "insufficeint funds" vidememo Ex. CW1/C and thereafter legal notice Ex. CW1/D was issued which was duly replied by the appellant.
20 The appellant has not put any question or suggestion to CW1 that he has not purchased a diamond ring worth Rs. 35 lac from M/s Jaipur Gem Palace. No question or suggestion is put to CW1 that he has not taken the delivery of the ring in question. The testimony to this effect has gone unrebutted. 21 The defence of the appellant is that he has substantial interest in the air line, which is defunct, and respondent has called him for the sale of his shares in the air line. The respondent has demanded his commission before arranging a meeting with prospective buyer as a result he has paid a sum of Rs. 1 lac in cash and cheque of Rs. 34 lac. The meeting was neither arranged nor the deal was finalized and thereafter respondent has presented the cheque for encashment with a malafide intention. The bill Ex. CW1/B has been raised by Jaipur Gem Palace whereas cheque is in the name of the respondent.
CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.11 / 16 22 The defence does not inspire confidence. The appellant has examined accountant of M/s Jaipur Gem Palace as DW1. His testimony shows that invoice Ex. DW1/1 ( also Ex. CW1/B) has been issued by M/s Jaipur Gem Palace. This bill is not in dispute which is in the name of appellant showing the purchase of diamond ring worth Rs. 35 lac out of which Rs. 1 lac was paid in cash and a cheque of Rs. 34Lac was issued. The bill shows that appellant has purchased the diamond ring. It is clear from the testimony of DW1 that revised form DVAT16 was filed by Jaipur Gem Palace. Nothing is brought on record by the appellant that filing of revised form DVAT16 is barred under any provision of law. Mere filing of revised DVAT form 16 does not in any way show that appellant has not purchased the diamond ring from the respondent who is the Managing Partner of M/s Jaipur Gem Palace.
23 The cheque in question has been issued in the name of the respondent after the purchase of the diamond ring. The respondent is Managing Partner of M/s Jaipur Gem Palace. The cheque in the name of respondent does not mean that he has not purchased the diamond ring and issued the cheque. CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.12 / 16 24 The appellant has not brought any evidence on record to show that he has substantial shares in Indus Airlines. It was for the appellant show that he was holding shares in the Airline and wanted to sell the same. He has not disclosed the name of alleged prospective buyer. No person will part with Rs. 35 lac merely in order to meet respective buyer for the purchase of his shares in the defunct airline. This is too big a pill to be swallowed. The defence cannot be relied upon in the absence of any evidence on record from the appellant.
25 The perusal of the record of this Court shows that on 28.7.2016 the appellant has shown his intention to settle the matter with the respondent. The case was adjourned for settlement. On 29.3.2017 the appellant has paid a sum of Rs. 1Lac to the respondent and sought further time to make the payment. On 3.6.2017 the appellant has undertaken to pay the outstanding dues by 1 st week of September. His statement to this effect was recorded. On 19.9.2017 the case was fixed for orders and on that day, part payment of Rs. 3Lac by way of pay order was made by the appellant to the respondent.
CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.13 / 16 26 The appellant has admitted his liability and even made a part payment towards outstanding dues. The question of settlement does not arise if appellant has no legal liability to the amount to the respondent. This fact itself shows that he has admitted his legal liability to pay the amount of the cheque to the respondent. 27 The testimony of CW1 shows that cheque in question duly filled was handed over to him by the appellant. The appellant has admitted the issuance of the cheque. The cheque relates to the account of the appellant with respect to the amount payable by him. The initial presumption as contemplated u/s 139 of the Act has to be raised in favour of the respondent. The presumption is rebuttable but the defence raised by way of rebuttal must be probable and capable of being accepted by the Court. Reliance is placed upon Crl. Appeal No. 1400/2011 tittled as G. L. Sharma Vs.Hemant Kishore decided on 13.01.2015 by our own High Court.
28 The initial presumption is in favour of respondent. The appellant has failed to substantiate his defence. The appellant has not examined any witness in order to substantiate his defence as taken in the reply Ex. CW1/F to the legal notice Ex. CW1/D or taken while CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.14 / 16 framing the notice of accusation u/s 251 CrPC. Mere raising of defence is not enough unless it is substantiated by bringing evidence on record. The testimony of CW1 is cogent, convincing and trustworthy which is relied upon.
29 The respondent has proved his case by overwhelming evidence that cheque was issued towards discharge of an existing legal liability. The appellant has admitted the issuance of cheque in question. The presumption u/s 139 of NI Act would operate. The appellant has failed to rebut the presumption by leading any evidence.
30 I do not find any infirmity in the judgment dated 3.10.2105 passed by Ld. Trial Court. The judgment of conviction is upheld.
31 The appellant has not made the entire payment involved in the cheque in question till date to the respondent despite the fact that he has taken sufficient time from the court to make the payment. Such kind of persons want to enjoy upon the money of others. The cheque is issued without any intent to pay the amount under the impression that he can get away with the imposition of fine. The CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.15 / 16 deterrent punishment is required so that persons issuing the cheques should not take these offences in a light manner. To my mind, there is nothing on the record to modify the sentence as imposed by Ld. Trial Court. Ld. Trial Court has rightly passed the sentence and accordingly sentence imposed upon the appellant is upheld. The amount received by the respondent shall be adjusted towards compensation amount as awarded by the Ld. Trial Court. 32 The appeal is dismissed. The appellant is taken into custody to serve the sentence as imposed by the Ld. Trial Court. His custody warrant be prepared.
33 Attested copy of the judgment be supplied to the appellant free of cost.
34 TCR record alongwith copy of the judgment be sent to the Ld. Trial Court for compliance.
35 Appeal file be consigned to record room.
Announced in the open court on 25th August , 2018 ( SURESH KUMAR GUPTA) ASJ04 & Spl. Judge (NDPS) SouthEast District Saket Courts, New Delhi CA No. 212/2015 Sandeep Sehgal v. Abdul Moin Page No.16 / 16