Delhi District Court
Sehgal vs . Shamsher Singh Gogi1 The Relevant ... on 6 April, 2013
IN THE COURT OF SHRI VINOD KUMAR MEENA, CIVIL JUDGE03, NEW DELHI DISTRICT, PATIALA HOUSE COURTS, NEW DELHI UNIQUE ID NO. 02403R0190092007 CC NO. 649/12 M/S SPECTRUM PAINTS LTD. C106, LAJPAT NAGAR, NEWDELHI110024. ....COMPLAINANT VERSUS ATUL SHARMA M/S K. D. INTERIORS B16/6, RAMESH NAGAR DOUBLE STOREY,NEW DELHI 110015 .... ACCUSED OFFENCE COMPLAINED OF : Section 138 of Negotiable Instrument Act. PLEA OF ACCUSED : Pleaded not guilty DATE OF INSTITUTION : 03.04.2007 DATE OF RESERVING ORDER : 26.03.2013 FINAL ORDER : Acquitted DATE OF PRONOUNCEMENT : 06.04.2013 JUDGMENT
1. The present complaint is filed by Sh. Dev Ashish Bhattacharya, Principal Officer as well as duly authorised representative of the complainant company Atul Sharma (henceforth referred as'accused') under Section 138 of Negotiable Instrument Act,1881 (hereinafter referred to as "The Act").
Brief Facts
2. It is alleged by the complainant that complainant company is dealing in the manufacture and sale of Specturm Texture Paint and accused had been appointed as dealer of the sale of the above mentioned CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 1 of pages 16 spectrum paint by the complainant company. On the demand of the accused complainant company used to supply the goods to the accused from time to time. In pursuance of the goods received by the accused and to clear his liabilities towards the complainant company the accused had issued a cheque no. 821244 dated 25.01.2007 amounting of Rs. 3,17,966.00 drawn on Canara Bank as full and final settlement of his pending bills. On presentation, the above mentioned cheque got dishonoured and were returned unpaid by the banker of the accused on the ground "Funds Insufficient" on 27.01.2007 . Thereafter, legal notice dated 14.02.2007 was served upon the accused. However, despite service of legal notice, accused failed to make the payment of cheques amount within the stipulated period.
3. Court took cognizance of the offence under Section138 of The Act and summoned the accused.
4. Accused appeared pursuant to the process issued by the Court. Notice under Section 251 Cr.P.C was read and explained to the accused to which he pleaded not guilty and claimed trial. Consequently, the case was listed for post notice complainant's evidence.
Substance of Evidence
5. In post notice evidence, complainant Dev Ashish Bhattacharya AR for the complainant examined himself as CW1.He substantiated the averments made in the complaint and proved the following documents vide Ex. CW1/1 to Ex CW1/6:
i. His affidavit of evidence vide Ex. CW1/A ii. Resolution dated 26.03.2007 vide Ex. CW1/1 iii. Ledger Account of the accused as maintained by the complainant company vide Ex. CW1/2.
iv. Original impugned cheque bearing no.821244 dated 25.01.2007 and Return memo dated 27.01.2007 vide Ex. CW1/3 and CW1/4. v. Copy of legal notice dated14.02.2007 vide CW1/5.
vi. Postal receipts as Ex CW1/6.
In his cross examination he had stated that he had been working with the complainant company since the date 06.03.1988. He had joined the complainant company as sale manager. He had further stated that his nature of duties were getting the products of complainant company specified from the architects and also deal with the appointed dealers of the company w.r.t their purchases from the complainant company. He had not taken any delivery certificate ( proof of delivery from the postal CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 2 of pages 16 authorties.
On 23.02.2012 complainant was again recalled for further cross examination wherein he had stated that he had not filed any dealership agreement on records and also had not filed any written purchase order of the accused on record. The material was being sold to the dealers against voluntarily stated that all the invoices are still in their custody. Complainant was asked to tell the name of the state where the material during he dealership was supplied to the accused to which he had answered that he can reply the same only after seeing their office records. He further admitted that the for sending the material manufactured by them from Rajasthan to Haryana, Form No.38 is required and for Delhi and if the bill is less than 25,000/ no form is required. He further stated that for sending the material to UP Form no.31 is required. He had no knowledge in which stated the accused was working and only after seeking the office records he could tell that accused had issued any form no. 31 or 38 to their company. However, he had not file any such form on Court records. CW1 was further questioned regarding the mode of transport to which he had replied that sometimes dealers used to collect the material from their godowns at Lajpat Nagar and sometimes the material was sent to the site through their tempo/conveyance and sometime through the transport. He further stated that complainant company had been taking delivery receipts from the persons to whom the material was supplied, however, he had not filed any delivery receipts for supplying the material to the accused on records. CW1 has also deposed that the document Ex. Cw1/2 was prepared by the account department and he could not tell the name of that person who had prepared the same. He admitted that Ex. CW1/2 is an unsigned computer generated document and has not been verified as true copy by anybody. He further admitted that it is not mentioned on Ex. Cw1/2 that same is a computer generated document and did not bear signature. He had stated that Ex. CW1/2 pertains to invoice number, amount of invoice, payments released against those invoice and the details of the debit and credit notes,if any. The entries of transactions were recorded by accounts personnel and not by him. CW1 had told that the impugned cheque was given to complainant company by the accused on the date mention on the impugned cheque itself, but only the accused knew as to who had had given the impugned cheque. He had further answered that the payment amount mentioned in the cheque in question was the total amount pending as on the date of the cheque and the accused had issued the impugned cheque thereby clearing the total pending amount on the date of the cheque. It was a continuous process and no such kind of confirmation/letters were taken from the accused for the settlement. In present case they had not taken any such letters/confirmation for alleged CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 3 of pages 16 full and final settlement of that date. He further denied that the impugned cheque was given by the accused as blank cheque as a security for the material to be supplied or that the complainant company with mala fide intention filled the cheque and presented the same which was not against any debt or due of the accused. Legal demand notice was sent through counsel through registered posed and same was not received back by complainant company unclaimed. However, he had mentioned in his complaint that accused has received the legal demand notice. He further replied that they neither they had taken any delivery certificated from the postal authorities nor they have filed any proof of delivery as legal demand notice deemed to be served when envelope containing legal demand notice did not received back. He further denied that no amount was due to be paid by the accused to the complainant or that he was deposing falsely.
6. CW2 Sh. Pankaj Sharma deposed that he had been working with the complainant company as an accounts officer and the accounts of the complainant company were maintained in computer even before his joining. He further stated that Ex. CW1/2 was not prepared by him and same has not been duly verified and signed by anybody on behalf of complainant company. On confronting with the document Ex. CW1/2, he stated that he has not given any declaration that Ex. CW1/2 has been certified as per provisions of Section 65A and 65B of the Evidence Act. CW2 further voluntarily stated that virus in computer has nothing to do with the print of statement of account Ex. CW1/2.
Vide separate statement, complainant's evidence was closed and matter was listed for examination of accused under Section 313 Cr.P.C.
Substance of Statement of Accused
7. All incriminating circumstances were put to the accused and his statement was recorded under Section 313 Cr.P.C. Accused refuted the complainant's claim and stated that the cheque in question was issued to the complainant as security cheques and same was duly singed blank cheque. He further stated that against the impugned cheque no material had been supplied to him and he had nothing to do with the impugned cheque. He has also not received any legal demand notice. Accused did not preferred to lead defence evidence. Accordingly, the matter was listed for final arguments.
8. I have heard the final arguments advanced by the rival counsels and perused the record carefully.
Essential ingredients: Legal Provisions CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 4 of pages 16
9. The essential ingredients which need be proved for constituting the offence under Section 138 of The Act were discussed in the case Jugesh Sehgal Vs. Shamsher Singh Gogi1 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 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.
Essential ingredient: Present Case
10. Let us now examine whether the complainant has proved the necessary ingredients of the offence under Section 138 of The Act or not.
1. 2009 (9) SCALE 455.
CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 5 of pages 16 The first ingredient of the offence stands proved as original cheques are placed on record as Ex. CW1/3 and the issuance of same is admitted by the accused.
11. The second ingredient of the offence is that the cheques must have been issued in discharge of legal liability. As the signatures on the cheques are admitted, the presumptions raised under Section 139 of The Act become applicable and the issuance of cheques 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 Mohan2
12. The third ingredient of the offence is that cheque must presented to the bank within a period of six months from the date mentioned on it. The cheques Ex.CW1/3 was returned back unpaid on 27.01.2007. The cheque is dated 25.01.2007. So it is evident that they were presented for payment within the statutory period of six months.
13. The fourth ingredient of the offence if that the cheque(s) must be returned unpaid. The cheques were returned unpaid for the reason "Insufficient Funds". The original bank return memo Ex.CW1/4 placed on record prove dishonour of cheques by virtue of presumption raised under Section 146 of The Act and during the trial and same went uncontroverted.
14. 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 same be served upon the accused. Postal receipts Ex CW1/6 shows the delivery of legal notice through registered post.
15. 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. Non payment of cheque amount is admitted by the accused in his examination under Section 313 Cr.P.C.
16. All the necessary ingredients for the offence have been made out against the accused with the aid and assistance of the presumptions raised under The Act. So the complainant has discharged the initial burden of proving his case beyond reasonable doubt and now the onus shifted upon the accused to come up with a probable defence and rebut the presumptions raised against him and put the burden back on the complainant.
Plea of Defence by Accused
2. AIR 2010 SC 1898.
CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 6 of pages 16
17. From the material on record and arguments the accused has raised a threefold defence. . Firstly the complaint in itself is not maintainable as not filed by the person who is duly authorised to represent and file the complaint on behalf of the company as there is no board of resolution from the complainant company Secondly, no legal demand notice was received by the accused; thirdly, there was no legal liability and cheques were given as security cheques;
First Plea of Defence
18. As far as First defence of the accused is concerned i.e ,the complaint in itself is not maintainable as not filed by the person who is duly authorised to represent and file the complaint on behalf of the company as there is no board of resolution from the complainant company, it is submitted by Ld. Counsel for accused that present complaint is not maintainable as same is filed by a person on behalf of the company who is not duly authorised by the company through Board of Resolution of Directors.
19. To decide the issue that has been arisen before the Court, the Court deem it fit to quote the observations made by Hon. Apex Court in Vishwa Mitter vs. O. P. Poddar3, which was reiterated again in MMTC ltd. and anrs vs. Medchl Chemicals and Pharma (P) ltd and anrs4, wherein it was observed that anyone can set the criminal law in motion by filing a complaint before a magistrate entitled to take cognizance. The relevant para quoted as under:
... it is clear that anyone can set the criminal law in motion by filing a complaint of facts constituting an offence before a Magistrate entitled to take cognizance. It has been held that no court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. It has been held that if any special statute prescribes offences and makes any special provision for taking cognizance of such offences under the statute, then the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by the statute. In the present case, the only eligibility criteria prescribed by Section 142 is 3 (1983) 4 SCC 701 4 AIR 2002 SC 182 CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 7 of pages 16 that the complaint must be by the payee or the holder in due course. This criteria is satisfied as the complaint is in the name and on behalf of the appellant Company..." (emphasis supplied)
20. Similar was reiterated by the Hon. High Court of Delhi in Standard Chartered Bank Vs. Mr. R. Vinay Kumar Bhasin5.
21. After going through the above mentioned observations made by Hon. Apex Court and by Hon. High Court of Delhi, it is cleared that Law in this regard is now well settled. Anyone can set the criminal law in motion by filing the complaint constituting an offence. For the offences under NI Act only criteria prescribed by Section 142 is that it must be instituted by the payee or holder in due course. The fact that the complaint lodged by a Manager or other employer, who had not been authorised by the Board of Directors to sign and file the complaint cannot be a ground for quashing the complaint.
22. It appears that Ld. Counsel for accused has made the plea of first defence in a routine manner, accordingly same is not sustainable and complaint cannot outrightly be rejected only on the grounds as averred by Ld. Counsel for accused due to the reasons mentioned above.
Second Plea of Accused
23. As far as the second defence of the accused is concerned i.e no legal demand notice was received by the accused. It is submitted by Ld. Counsel for accused that the accused has not received the legal demand notice and he came to know about the case only when he received processes from the Court. He further brought the attention of the Court towards the fact that no proof regarding the service of the legal notice has been placed on records by the complainant which shows that the complainant has not sent any legal demand notice to the accused.
24. To elucidate the position regarding the service of the legal demand notice. It is pertinent to quote here the judgment passed by Hon. High Court of Delhi, titled as HDFC Bank Ltd. Vs. Amit Kumar Singh 6. The relevant para reads as under:
5. 98 (2002) DLT 308
6. 160 (2009) Delhi Law Times 478 CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 8 of pages 16 v. "...14. Section 138 (b), N. I. Act is unambiuous in requiring a demand in writing to be made by the payee by "giving a notice in writing to the drawer of the cheque within 30 days of receipt of intimation that the cheque has dishonoured". The expression pf "giving of notice" has to be read in the context of Section 27 of the GC Act. In terms of the said provisions whenever a statute uses the words "served" or "give" or "sent" unless a different intention appears, service would be presumed "property" addressing, numbering and positing by registered post a letter containing the document. Unless the contrary is proved service would be deemed to have been effected at that time at which the letter would be delivered in the ordinary Course.
vi. ...16. The above legal position is consistent with the legislative intent of the Parliament in enacting Section 144, N. I. Act. Although this provision talks of the mode of service of summons to either a witness or an accused under the N. I. Act, this Court finds no reason why the same standard should not be insisted upon for service of legal notice upon the accused by the complainant prior to the filing of the complaint. The reason for this that where ever a summoning order is passed and summons are sent to the accused, it would be sent at the same address shown for accused in the complaint. This address ought not to be any different from the address in the legal notice. It is therefore a continuous chain of events. First there is dishonour of the cheque. Next it the legal notice to be sent to the drawer within 30 days of the payee receiving an intimation from the Bank of the dishonour of the cheque. Such legal notice in writing has to be addressed to the drawer available with the complainant such notice. Such notice has to be received by the drawer and he should fail to make payment within 15 days after receipt of such notice. This chain thereafter, continues into the next stage following the failure to make the payment. The CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 9 of pages 16 complainant or the drawee then approaches the criminal Court with a complaint in which he will implead as accused, the drawer of the cheque, with the address being shown as the same to which the legal notice was sent. The summon, therefore, goes to the same address.
vii. ... 24. At this juncture, this Court would also like to emphasize that even under Section 27, GC Act the requirement is that the notice must be "properly" addressed. The word "properly" obviously envisages the notice being sent to the correct present address of the noticee. The complainant will not be able to demonstrate before the Court that it had "properly' addressed the noticee unless it is able to produce the proof of delivery in the form of a postal endorsement or certificate of the courier agency or an internet generated delivery report or some other proof of delivery. (emphasis supplied).
25. The accused has also categorically mentioned throughout the course of trial that he has not received any legal notice. He specifically averred at the time of framing of notice u/s 251 Cr. P. C that he has not received any legal demand notice. In his statement u/s 313 Cr. P. C he also categorically mentioned that he has not received any legal demand notice. After going through the above mentioned observations made by the Justice S. Murlidharan in the above mentioned case and after going through the averments made by both the parties during the Course of evidence and after going through all the documents it is clear that it is incumbent upon the complainant to prove that he has sent a legal demand notice by producing the delivery report/AD. In the present case complainant has not filed any record/proof regarding the delivery of the legal demand notice. The complainant has only placed one document Ex. CW1/6 which is the original postal receipt. Perusal of the same it is revealed that it is only written as addressed to Atul Sharma, K. D Enterprises, no address has been mentioned on the same nor any track record regarding the same has been filed, no AD has also been placed on record. CW1 i.e AR for the complainant in his crossexamination on 23.02.2012 has given a very vague answer and averred that notice was sent by our advocate and AD card might have been received by him at his address. He also admitted that no such AD card has been received by the complainant company.
CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 10 of pages 16
26. To make the position here more clear, the Court find it pertinent to mention here the observations made by Hon'ble Supreme Court in D.Vinod Shivappa Versus Nanda Belliappa7 wherein it was made clear that in case where the notice has been returned unclaimed or a notice has been returned after having been refused by the accused, the principle incorporated in Section 27 of General Clauses Act can profitably be imported. The relevant para reads as under: " 15 ... if the complainant is able to prove that the drawer of the cheque knew about the notice and deliberately evaded service and got a false endorsement made only to defeat the process of law, the Court shall presume service of the notice. This, however, is a matter of evidence and proof. Thus, even in a case where the notice is returned with the endorsement that premises has always been found locked or the addressee was not available at the time of postal delivery,it will be open to the complainant to prove at the trial by evidence that the endorsement is not correct and that the addressee, namely, the drawer of the cheque, with the knowledge of the notice had deliberately avoided to receive the notice."
27. In view of the observations made by the Hon. Superior Courts as mentioned above it would be unsafe to say that deeming provisions of Section 27 of General Clauses Act would be attracted as the drawer ( noticee) has proved that legal notice has not really served and he was not responsible for such non service. Accordingly, it is clear that the accused has raised a probable defence in this case to the effect that legal notice has not served to him. As it is made clear that the legal notice has not been served to the accused, there is no need to deal with the case on the other defences. However, for the sake of clarity and to give the finality to the order, the other defences, raised by the accused is hereby also discussed.
Third Plea
28. As far as the third plea of defence of the accused is concerned i.e there was no legal liability and cheques were given as security cheques, it is averred by the ld. Counsel for accused that there was no legal liability at the time when the cheque was presented to the bank for
7. (2006) 6 SCC 456 CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 11 of pages 16 encashment and the impugned cheque was given as security cheque along with other cheques which are still in the possession of the complainant. It is also submitted by Ld. Counsel for accused that the fact that there was no legal liability is substantiated with the fact that the complainant has not annexed any invoices, delivery receipt, transportation receipt etc in support of the claim. It is further submitted by ld. Counsel for accused that complainant has only filed the computer generated statement of account and same is not supported with the certificate u/s 65B of Indian evidence Act. Ld. Counsel for accused submitted that there is not even a single mention in the complaint or in the evidence by way of affidavit as to what was the liability and how that liability has arrived. Ld. Counsel further submitted that present complaint case is based on false and concocted facts.
29. The Court after the perusal of the complaint, evidence by way of affidavit and the crossexamination of the complainant witness has made the observations that it is averred in the complaint as well as evidence by way of affidavit on behalf of the complainant that the cheque was issued in pursuance of the goods received by the accused and to discharge the liability towards the complainant company, however, nowhere it has been mentioned as to when and how the goods were delivered and the claim is relied only upon the statement of account.
30. In the present matter allegedly the cheque has been given by the accused to discharge his liability to the complainant company. However, it has not been mentioned in the complaint as well as evidence by way of affidavit to whom accused has handed over the cheque and when it was specifically asked to CW1, AR for complainant, during his cross examination as to, to whom the cheque was issued by accused, it was averred by the CW1 that only the accused knows to whom he had given the cheque. The relevant para is quoted as under: "...Q. Please inform when and to whom the cheque in question was issued by the accused?
A. the cheque in question was given by the accused to the complainant company. Only the accused knows to whom he has given the cheque in question..."
31. It is also observed by the Court that the complainant in his complaint as well as evidence by way of affidavit has specifically averred that the proprietorship concern i.e K. D. Interior of the accused was appointed as dealer for the sale of the spectrum paints by the complainant CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 12 of pages 16 company. However, no document pertaining to the same has been annexed by the complainant to show the relationship of the dealership as averred in the complaint. The complainant has not filed the relevant documents, regarding the dealership despite giving reasonable opportunities. The relevant para reads as under:
"... I have not filed any dealership agreement on record. ( vol.) I can file the same on record..."
32. It is also pertinent to mention here that the liability in the present case is w.r.t the purchase of the goods sold/delivered by the complainant company. However, complainant has not annexed the purchase order or the invoice or the delivery receipts or the transportation receipt w.r.t the goods which were sold/delivered by the complainant company to the accused. It is admitted by AR of the complainant in his cross examination as CW1 that goods were sold to the dealer against invoices. Relevant para reads as under: "... The material is being sold to the dealers against invoices. Likewise the material was allegedly sold to the accused against invoices. I have not filed any such invoice on record. ( vol.) But all the invoices are in our custody..."
Similar was averred with respect to delivery receipts. The relevant para reads as under:
"... I have not filed any such delivery receipts for having supplying the material to the accused on record..."
33. It is very strange that despite being giving reasonable opportunities the documents/certified copies of the documents as mentioned above to reflect the liability on the part of the accused have not been filed on behalf of the complainant.
34. It is also observed by the Court that the AR for the complainant in his crossexamination as CW1 has admitted that the impugned cheque was liquidated on the basis of the settlement and the statement of account. Admittedly, no settlement has been placed on records and perusal of the statement of account, it is reflected that it is the computer generated copies of statement of accounts. Further perusal of all these documents, it is revealed that computer generated copies are not CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 13 of pages 16 accompanied with the Form 65 B of the Indian Evidence Act. It is admitted by CW2, accounts officer of the complainant company, that the accounts were not prepared by him and were prepared before his joining the complainant company. It is also admitted fact that no certificate under Section 65 B of the Indian Evidence Act have been annexed with the statement of accounts. Relevant para reads as under: "... The witness is confronted with his affidavit whereas he confirms that he has not given any certificate to the statement of account Ex.
CW1/2 and has not given any declaration that Ex. CW1/2 is certified as per provisions of Section 65 A and 65 B of Evidence Act..."
35. Keeping in mind the provisions as provided under Section 65 B of the Indian Evidence Act as well as the judgment passed by Hon. Supreme Court in State Vs. Mohd. Afzal and ors,8 and by Hon. High Court of Delhi in Devesh Kumar vs. State9, it is clear that the computer generated copies cannot be read into evidence if not accompanied with the certificate under section 65 B of the Indian Evidence Act. Accordingly, as the computer generated copy of statement of account in the present matter is not accompanied with the certificate as per Section 65 B of the Indian Evidence Act, the same cannot be read into evidence.
Further perusal of the cheque it is revealed that the signatures and details in the cheque are of different ink. It gives an indication and fortify the averment of the accused that the cheques had been given as the security cheques. Keeping in mind the above observations the Court is of the view that the present case has been filed on false and concocted facts. The complainant has miserably failed that there was legal liability at the time when the impugned cheques have been issued.
36. In view of the above discussion, the Court is of considered opinion that court has successfully proved that the cheques were given as security. The Hon'ble Superior courts, in their various judgments, have mandated that the cheque issued for securitypurposes does not attract the liability under Section 138 of the Act. In M. S. Narayana Menon @ Mani Vs. State Kerala and another 10, the Hon'ble Apex Court observed:
"The appellant clearly said that nothing is due and the cheque was issued by way of security. The said defence has been accepted as probable. If the defence is acceptable as probable the
8. 2003 IV AD (CR) 205 9. Cr. Appeal No. 793/2004
10. 2006 (6) SCC 39 CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 14 of pages 16 cheque, therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act."
The above quoted judgment was relied upon by the Hon'ble Delhi High Court in Collage Culture and others vs. Apparel Export Promotion Council 11. As the cheque was not issued in discharge of any liability but merely for security, the provisions of Section 138 are not attracted.
37. It is trite now that the accused may rebut the presumptions from the circumstances of the case and need not lead positive evidence for rebuttal. In Kumar Exports v. Sharma Carpets12 discussing at length the question of the rebuttal of the presumption, it was observed:
"....Apart from adducing direct evidence to prove that the notes in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of The Act. The accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial...."
38. In Birender Singh Vs. State (NCT of Delhi) and Anr.I (2008) BC 452, it was held:
"5. There is no doubt that the burden rests on the accused to rebut the presumption as raised
11. 2007 (99) DRJ 2512
12. (2009) 2 SCC 513 CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 15 of pages 16 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 cross examination of the complainant and his witnesses and bringing out on record, through crossexamination, that the complainant was altar and there was no privity of contract between the complainant and the accused and cheques were misused."
Conclusion
39. As quoted above, the standard of proof so as to establish a defence on the part of an accused is 'preponderance of probabilities'. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies. After carefully scrutinizing and analyzing the evidence together with the circumstances discussed above,there is no doubt in my mind that the accused has come up with a highly probable defence. The Court is of the opinion that there is sufficient material on record to displace the presumptions raised under The Act. Infact the circumstances and material on record contradict the averments made in the complaint and rather indicate towards the fact that the complainant has infact instituted a false and fabricated complaint.
40. In totality of the circumstances and the discussions above, the Court is of the considered view that the accused has proved his defence on the basis of preponderance of probabilities and successfully rebutted the presumptions raised under The Act.
Decision
41. In the considered opinion of the Court, in view of the legal provisions and case law discussed, the accused is held not guilty for the offence u/s 138 NI Act and is accordingly, acquitted.
Announced in the open Court (Vinod Kumar Meena) th On 6 April,2013 CJ03/NDD/PHC/ND/06.04.2013 CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 16 of pages 16 CC No. 649/1/12 Spectrum Paints ltd. Vs. Atul Sharma 06.04.2013 Present: AR for the complainant.
Ld. Counsel for accused along with accused in person.
Vide my separate order of even date pronounced in the open Court, accused is held not guilty for the offence u/s 138 NI Act and is accordingly, acquitted.
Earlier bail bond and surety bond stands cancelled. Surety stands discharged.
Accused is admitted to bail u/s 437 A Cr. P. C on furnishing a fresh bail bond and surety bond in the sum of Rs. 25,000/. Bail bonds furnished and accepted.
File be consigned to records room after due compliance.
(Vinod Kumar Meena) CJ03/ NDD/PHC/New Delhi/06.04.2013 CC NO. 649/12 M/S SPECTRUM PAINTS LTD.V ATUL SHARMA 17 of pages 16