Delhi District Court
Soni Publication Pvt Ltd vs S.V.R Book Distributers on 27 March, 2024
IN THE COURT OF METROPOLITAN MAGISTRATE (CENTRAL)
NI ACT-04, CENTRAL DISTRICT, TIS HAZARI COURT, DELHI.
Presided over by: - Mr. Arjun Kirar
CC No. 523041/2016
Unique case ID No. DLCT020028062013
In the matter of:-
M/s Soni Publication Pvt. Ltd.
11096, East Park road,
Doriwalan, Karol Bagh,
New Delhi-110005
Through its Authorized Representative
Sh. Ishwar Chand ......Complainant
Versus
(1) M/s S.V.R. Book Distributers
(2) Bondu Uma Nageshwara Rao,
Proprietor/ Authorized Signatory of:-
M/s S.V.R. Book Distributers.
Both At:-
A-13-1050, Vasavi Colony,
Hyderabad-35 (A.P.) ....... Accused
Date of Institution : 20.04.2013
Offence complained of : Section 138 Negotiable
or proved Instrument Act, 1881 Digitally
signed by
ARJUN ARJUN KIRAR
Plea of Accused : Not guilty Date:
KIRAR 2024.03.27
15:24:58
+0000
CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 1 of12
Date of Filing : 12.04.2013
Date of Decision : 27.03.2024
Final Order : Acquitted
Argued by:- : Mr. Harsh Jaitka, Ld. Counsel for
complainant.
: Mr. Pradeep Kumar, Ld. counsel for
accused.
JUDGMENT
BRIEF STATEMENT OF REASONS FOR THE DECISION: -
FACTUAL MATRIX-
1. Shorn off the unnecessary details, the core facts of the case of the complainant which need recital are as follows:-
The complainant is a company dealing in supply of goods/books. The accused no. 1 a proprietorship concern, through its proprietor i.e. accused no. 2, started placing orders to the complainant for supply of books. As per the orders of accused from time to time, the complainant supplied books and in financial year 2012-13, a sum of Rs. 9,75,686 was outstanding against the accused for the books supplied to him. The goods were supplied to accused through transport for which goods receipts were issued by transporter. The original goods receipts were sent to the accused, who got released the goods from the transporter. In discharge of his liability, the accused Digitally issued cheque bearing no. 881172 dated 20.02.2013 for a signed by ARJUN ARJUN KIRAR KIRAR Date:
2024.03.27 15:25:17 +0000 CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 2 of12 sum of Rs. 9,75,686/- drawn on HDFC Bank, Hyderabad. On its representation, the cheque was returned unpaid with the remarks "funds insufficient" vide separate Return Memo dated 23.02.2013. A Legal Demand Notice dated 27.02.2013 and 14.03.2013 was sent to accused no. 1 and accused no. 2 respectively. However, the accused failed to pay the the amount within the statutory period.
Consequently, the instant complaint was instituted.
2. Notice of accusation under Section 251, Code of Criminal Procedure, 1973 (hereinafter referred to as "CrPC") was framed against the accused to which he pleaded not guilty and claimed trial. In his plea of defence, he stated that he had not received the stock from the complainant. Cheque had been given by him to the complainant as blank signed security cheque at the time of entering into the business with complainant.
3. In order to substantiate the claim, AR of the complainant Ms. Renu Sethi got examined herself as CW-1 and tendered her evidence by way of affidavit, Ex. CW-1/X. She relied upon the following documents:-
(i) Ex. CW1/A is the Authorization Letter.
(ii) Ex. CW1/B (colly) are computer generated copies of orders placed by accused via E-mail
(iii) Ex. CW1/C (colly) certified copies of invoices.
(iv) Ex. CW1/D is the certified copy of statement of account.
(v) Ex. CW1/E is the cheque in question.
(vi) Ex. CW1/F is Bank Return Memo.
(vii) Ex. CW1/G1 and Ex. CW1/G2 are Legal Demand Notices.
(viii) Ex. CW1/H1 and Ex. CW1/H2 are postal receipts.
(ix) Ex. CW1/I is undelivered envelope.
(x) Ex. CW1/J is reply to legal notice.
(xi) Mark X (colly) are copies of goods receipts. Digitally
signed by
ARJUN
ARJUN KIRAR
KIRAR Date:
2024.03.27
15:25:27
+0000
CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 3 of12
CW1 was cross-examined at length by Ld. Counsel for the accused.
4. Statement of the accused person under Section 313 Cr.P.C. was recorded. He stated that he had given the cheque in question to the complainant as blank signed security cheque. He further stated that the complainant did not supply any material (books) to him and in the consignment note Mark X (colly), the consignee's name and address is mentioned as self. He further stated that the complainant has one office at Hyderabad and the goods were supplied to the said office of the complainant only and not to him and same does not bear his signatures or stamp. He further stated that the complainant did not return his cheque and he has no liability towards the complainant. Further, the accused expressed his willingness to lead defence evidence.
5. Accused entered the witness box as DW-1. He was examined-in-chief and thereafter cross-examined at length by Ld. Counsel for the Complainant.
6. Arguments heard at length from both the sides. Record perused.
7. At the outset, it worths a mention that to bring home the guilt of the accused, the complainant has to prove beyond reasonable doubt elements of Section 138 Negotiable Instrument Act by crossing the following legal benchmarks:-
a.) The cheque was drawn by accused/drawer on account maintained by him with the banker for payment of any amount of money out of that account to the complainant.
b.) The said payment was made for discharge of his legally and enforceable debt or other liability, in whole or in part.
c.) The said cheque was returned unpaid by the bank. Digitally
signed by
ARJUN ARJUN KIRAR
Date:
KIRAR 2024.03.27
15:25:40
+0000
CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 4 of12
d.) The cheque was presented before the bank within a period of
three months from the date on which it was drawn or within a period of its validity, whenever is earlier.
e.) The payee or the holder in due course of the cheque as the case may be made a demand for the payment of said amount of money by giving the notice in writing to the drawer of the cheque within 30 days of receipt of information by him from the bank regarding the return of the cheque as unpaid.
f.) The drawer of the cheques 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 cheque within 15 days of the receipt of the said notice.
Further, a combined reading of Section 118, 139 & 146 of NI Act, provide a bunch of presumption in favour of complainant, which are as follows:-
(i) The cheque was drawn/transferred/accepted for consideration.
(ii) Holder of the cheque has lawfully received the cheque, meaning thereby that the holder was in lawful possession of the cheque.
(iii) The cheque was given in the discharge of any debt or liability.
(iv) Legally enforceable debt or liability was in existence at the time of issuance of the cheque; (contrary view has been overruled by the three judges bench of Hon'ble Supreme Court in Rangappa v.
S.Mohan decided on 07.05.2010).
(v) The cheque was of the nature as described in Section 138;
(vi) The cheque was drawn by the person who was maintaining the
Digitally
signed by
ARJUN
ARJUN KIRAR
KIRAR Date:
2024.03.27
CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 5 of12 15:25:53
+0000
account pertaining to the cheque;
(vii) Amount of money mentioned in the cheque was intended to be given;
(viii) The cheque has been dishonoured for the reason mentioned in the memo.
8. After analysis of the material on record it is undisputed position that the cheque in question bears the signature of the accused. Further, from the unrebutted testimony of CW1 qua presentation and dishonour of the cheque in question and unimpeached dishonour memo, the factum of presentment of the cheque within its period of validity and the factum of its dishonour stand established. Further perusal of record reveals that the accused has admitted the receiving of the legal demand notice. However, the accused did not make the payment of the cheque amount within 15 days of receipt of the legal demand notice. Therefore, cause of action against the accused arose and instant complaint was filed. Thus it is manifest that the complainant has complied all the mandatory requirements of Section 138 and section 142 of NI Act. Since, in the present case, complainant has successfully established that the cheque in dispute was issued by the accused and the same was dishonoured and thereafter accused despite the service of the statutory notice, failed to make the payment, a presumption under Section 139 NI Act is drawn in favour of complainant to the effect that the cheque in dispute was issued by the accused for a legally enforceable debt.
9. At this stage, it is important to highlight the ratio of the decision by the Hon'ble Apex Court in the case titled as Rangapa vs. Sri Mohan, AIR 2010 SC 1898. In para 14 of the judgment, the Hon'ble Supreme Court has observed as herein below:- Digitally signed by ARJUN ARJUN KIRAR Date:
KIRAR 2024.03.27 15:26:09 +0000 CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 6 of12 "In light of these extracts, we are in agreement with the respondent claimant 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 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 cheque is largely in the nature of a civil wrong whose impact is usuallly confined Digitally to the private parties involved in a commercial ARJUN signed by ARJUN KIRAR Date:
transaction. In such a scenario, the test of KIRAR 2024.03.27 15:26:18 +0000 CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 7 of12 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 create 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 adduce evidence of his/her own."
10. Keeping in view the above legal discussion, now the moot question before the court is whether accused has been able to successfully rebut the mandatory presumption of law either by bringing on record any positive evidence or by creating doubt in the veracity of the material brought forth by the complainant. This court has meticulously analysed the oral and documentary evidence as adduced on behalf of the parties in the light of the legal benchmarks as discussed. In the instant case this court is of the opinion that accused has successfully rebutted the mandatory presumption of law by punching holes in the case of the complainant and had made its version doubtful. This opinion of the court is based upon the following Digitally signed by ARJUN ARJUN KIRAR CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 8 of12 Date:
KIRAR 2024.03.27
15:26:28
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observations:-
The whole case of the complainant is based on the premise that the accused used to place orders to the complainant for supply of books and complainant used to supply the books and in financial year 2012- 2013, a sum of Rs. 9,75,686/- was outstanding against the accused for the books supplied to him. In discharge of his liability, the accused issued the cheque in question which on presentation, got dishbonoured. The complainant has placed on record computer generated copies of orders placed by accused via E-mail, copies of invoices, copy of statement of account. It is significant to note that mere placing a document on record does not mean that the document has been proved. The person who prepared the document must be examined and the contents of the document must be connected with the transaction in question. Thereafter, opposite party will have cross- examination right of the said witness. In the present case, the complainant has not examined any witness who prepared the above- said documents. Thus, the above-said documents have not been proved as per the evidence act and thus no reliance can be placed on them.
There is no agreement placed on record by the complainant. The AR of complainant, in her cross-examination, admitted that an agreement was entered with the accused. It is admitted by the AR for the complainant that there is no agreement on record. In absence of any agreement, it is difficult to ascertain the terms and conditions agreed between the parties. Further, in absence of agreement, it is difficult to connect the transaction in question with the cheque in question. In absence of agreement, it is not ascertainable whether the goods were Digitally signed by ARJUN CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 9 of12 ARJUN KIRAR KIRAR Date:
2024.03.27 15:26:41 +0000 to be supplied at seller's place or buyer's place, whether the goods were to be collected by buyer or they were to be supplied by seller at buyer's place. It is further not ascertainable whether time of delivery of goods was essence of contract or not. Thus, the not placing on record the agreement between the parties has created doubt on the version of the complainant.
The complainant has placed on record document Mark X (colly)., copies of good receipts/ transport receipts. No reliance can be placed on the said document firstly because the said document has not been proved as per the evidence act. Secondly, the name of the consignee in all the receipts except one, shows 'self' and it does not show the name of the accused in any of the receipts except one. Thirdly, none of the said receipts bears signature and stamp of the accused, i.e. it does not have receiving from the accused. Thus, there is no material on record which proves that the books were supplied to the accused.
It is admitted fact by the AR for the complainant that complainant has one branch in Hyderabad and Mr. Sharma is the Manager of Hyderabad Branch of complainant company. The fact that the document Mark X (colly) goods receipt/ transport receipt, shows the name of consignee as 'self'. It is also admitted by AR of complainant that the meaning of 'self' as consignee means that the goods were sent to the complainant's office. The inference that can be drawn here is that the books were delivered by the complainant at their own Hyderabad branch and not to the accused.
The AR of the complainant admitted that the goods were returned by accused and one Chander who was employee of complainant, was given Rs. 5,281/- for lifting the goods from transport and said goods Digitally CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 10 of12 signed by ARJUN ARJUN KIRAR KIRAR Date:
2024.03.27 15:26:52 +0000 came back to the office of complainant. This fact further creates doubt in the case of the complainant. It gives the inference that when the goods were returned to the complainant by the accused, then how the amount in the cheque in question is a legally enforceable debt. Thus the complainant has failed to prove that it was a legally enforceable debt.
It is admitted by the AR of the complainant that the present cheque was given as security by the accused and particulars of the cheque were filled by the accountant of the complainant in Delhi. In present case, when the complainant has failed to prove that it was a legally enforceable debt, thus the liability on the cheque does not arise and it can safely be said that the complainant has misused the security cheque.
11. From the above observations and discussion, it is undeniably evident that accused has remained successful in rebutting the mandatory presumption in favour of the complainant by probablising the defence that the cheque in question was not drawn in lieu of the transaction as alleged by the complainant by creating doubt in the truthfulness and verity of material brought forth by the complainant. In the case titled as Krishna Janardhana Bhat V. Dattatreya G Hegde (2008) Volume II SCC Crl. 166, it was interalia observed by Hon'ble Supreme Court that if accused is able to raise a probable defence which creates doubt about the existence of legally enforceable debt and liability, the onus shift back to the complainant. However, the evidence adduced on behalf of complainant does not seem to be sufficient enough which could have helped the complainant to discharge the burden of proof shifted upon him.
12. To recapitulate the above discussion, the accused has been successful CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 11 of12 Digitally signed by ARJUN ARJUN KIRAR Date:
KIRAR 2024.03.27
15:27:01
+0000
in establishing a probable defence on the standard of preponderance of probabilities to rebut the presumption under section 118 and 139 of the NI Act by making dents in the case of the complainant on the basis of the materials already brought on the record by the complainant. Resultantly, the complaint of the complainant is hereby dismissed and the accused is hereby acquitted of the offence under section 138 of the NI Act.
Digitally signed
Announced in the open court ARJUN by ARJUN
KIRAR
on 27.03.2024 KIRAR Date:
2024.03.27
15:27:11 +0000
(Arjun Kirar)
MM, NI Act-04, Central District, THC
27.03.2024
Note:- This judgment contains 12 pages and each page has been signed by me.
CC No. 523041/2016 Soni Publication Pvt. Ltd. Vs. S.V.R. Book Distributers 12 of12