Delhi District Court
Vaibhav Gupta vs Jmk Tyres on 26 November, 2024
IN THE COURT OF MS. MARILYN JOANNA KHAKHA,
MAGISTRATE FIRST CLASS, N.I. ACT -06, SOUTH WEST, DWARKA,
DELHI
CC No. 13948/2019
CNR No. DLSW02-019442-2019
Vaibhav Gupta
Proprietor of M/s Alliance Traders
T-770, 2nd floor, DCM Road,
Delhi - 110006. ........Complainant
Versus
J.M.K. Tyres
Near Syndicate Bank
Bilaspur Chowk
Bilaspur, Haryana - 122413.
Also at
M/S JMK Tyres
Proprietor - Arun Kumar
NH-8, Shiv Mandir
Panchgaon, Distt. Gurgaon
Haryana. .........Accused
DATE OF INSTITUTION : 24.04.2019
OFFENCE COMPLAINED OF : U/s 138 N.I. Act
DATE OF JUDGMENT : 26.11.2024
FINAL ORDER : Acquitted
Judgment
1. The instant matter has originated out of a complaint u/s 138 Negotiable
Instruments Act (hereinafter referred to as "NI Act") filed by the
CC No. 13948/2019 MARILYN Digitally Page No. 1/25
signed by
MARILYN
JOANNA Date: 2024.11.26
JOANNA KHAKHA
KHAKHA 16:22:15 +0530
complainant against the accused alleging that cheque bearing no. 935391
dated 01.02.2019 of Rs. 4,75,000/- issued by the accused in favour of the
complainant which was subsequently dishonoured vide return memo
dated 28.02.2019 with the remarks "funds insufficient" in the memo and
the accused did not pay the above-mentioned amount despite receiving
the legal demand notice dated 20.03.2019.
BRIEF FACTS OF THE CASE
2. It is the case of the complainant that the accused had purchased Radial Tempo Tyres (8.25R 16PR) from the complainant vide invoice no. R-259 dated 16.07.2018 for a sum of Rs. 2,63,200/- and invoice no. R-475 dated 26.02.2019 for a sum of Rs. 2,11,800/-, totaling to a sum of Rs. 4,75,000/- and in discharge of his legal liability, the accused handed over cheque no. 935391 dated 01.02.2019 for Rs. 4,75,000/- drawn on Syndicate Bank, Bilaspur Branch, Faridabad (hereinafter referred to as the "cheque in question") with the assurance that the same shall be honoured on presentation in their bank for encashment.
3. However, the same was returned as dishonoured with the remarks "funds insufficient" vide bank return memo dated 28.02.2019. The information with respect to dishonour of the cheque in question was received by the complainant on 02.03.2019 and the legal demand notice was sent on the same date to the accused, asking him to make payment of the cheque amount within 15 days from the date of return. Despite the legal demand notice being duly served to the accused, the accused failed to make payment towards the cheque amount within the statutory period. A reply Digitally signed by MARILYN MARILYN JOANNA JOANNA KHAKHA KHAKHA Date:
CC No. 13948/2019 2024.11.26 16:22:23 +0530 Page No. 2/25 to the legal demand notice was sent on 27.03. 2019 wherein the accused admitted the fact that he had business relations with the complainant and had handed over a cheque in question to the complainant. However, no payment was made by the accused which is by the present complaint has been instituted against him.
4. Summons were issued against the accused vide order dated 24.04.2019 and notice was framed upon the accused on 23.12.2019. Accused stated that he had purchased goods worth Rs. 2,63,000/- from the complainant through one Sh. Sunil Dutta who is an employee of the complainant firm. The cheque in question was also handed over to Sh. Sunil Dutta in blank signed condition as a security cheque which is done in ordinary course of business. He admitted that he received the legal demand notice and pursuant to that he got to know about this case instituted against him. At that time, he also got to know that Sh. Sunil Dutta had resigned from the complainant company. He only admitted his liability up to Rs. 2,63,000/- and stated that the complainant has misused his cheque. Application under Section 145(2) N.I. Act of the accused was allowed on 23.12.2019 and he was granted liberty to cross-examine the complainant.
5. The complainant, CW-1 was examined and cross-examined on 16.09.2022 wherein he adopted his pre-summoning evidence and relied upon Ex. CW-1/1 to Ex. CW-1/6. The two invoices were Ex. CW-1/1 (Colly), the original cheque was Ex. CW-1/2, the return memo was Ex. CW-1/3, the legal notice was Ex. CW-1/4, the postal receipt was Ex. CW- 1/5 and reply to the legal notice was Ex. CW-1/6. The complainant stated that he was running a business of tyres. He also stated that he was in the business of sale of Tyres Manufactured in China. He denied knowing Digitally signed MARILYN by MARILYN JOANNA JOANNA KHAKHA CC No. 13948/2019 KHAKHA Date:
2024.11.26 Page No. 3/2516:22:31 +0530 anyone with the name Sunil Dutta but stated that he knew one B.K. Dutta who was his former employee and used to deal with the accused company. He admitted that he has never dealt with the accused company on his own. Whenever the invoice is raised, e-way bill of the goods sold was generated in the name of the purchaser. It is the case of the complainant that goods were supplied to the accused company about 4-6 times upon their demand and payment regarding 2 bills was still due. He denied suggestions that the complainant company only supplied goods to the accused company once. He also stated that normally, RTEGS is done by his clients after the goods are delivered but since payment of one invoice was due to be made by the accused company, the cheque in question was given in advance for the second invoice and for the payment qua the first invoice. He denied suggestions that Chinese tyres do not come for the size of 8.25R16. He also stated that he can produce the e- way bill generated for the invoices placed on record. He admitted that there are no e-way bills that have been filed by him in his complaint. He denied suggestions that the e-way bill have not been filed because the same were never generated. He denied suggestions of the cheque in question being a security cheque. He denied suggestions that the particulars on the cheque in question were filled later on by the complainant company. He admitted receiving the reply to the legal demand notice. CE was closed on the same date after CW-1 was discharged.
6. Statement of accused under Section 313 Cr.P.C. was recorded on 16.09.2022 and he stated that he wishes to lead defence evidence. In his statement under Section 313 Cr.P.C., he stated that he does not know the Digitally signed by MARILYN MARILYN JOANNA JOANNA KHAKHA CC No. 13948/2019 KHAKHA Date:
2024.11.26 Page No. 4/25 16:22:39 +0530 complainant but had financial dealings with his firm M/s Alliance Traders. The cheque in question also belongs to his bank account and contains his signatures. He stated that he contacted the complainant company through their marketing executive Sunil Dutta for the purchase of tyres. He admitted one of the invoices for a sum of Rs 2,63,000/- which was raised in the year 2018. However, it was his statement that the second invoice of Rs. 2,11,800/- was false in baseless. Prior to purchasing the tyres which were valued at Rs. 2,63,000/-, the accused had handed over the cheque in question in blank sign condition to the complainant as security. However, the amount filled by the complainant in the cheque in question was Rs 4,75,000/- which exceeds his actual liability. He had told the complainant on the phone that he owes him only Rs. 2,63,000/- and that he wishes to pay the same in some time but the complainant still proceeded to lodge the present complaint against the accused. He received the legal demand notice to which he filed a reply. He also explained that, in their business, it is a routine to provide security cheques before the delivery of goods. It is also a convention that until and unless the previous payment is made, the seller does not despatch the subsequent consignments. Since the accused did not make the prior payment of Rs. 2,63,000/- to the complainant, it does not make sense for the complainant to send him a subsequent consignment of Rs 2,11,000/-. He also stated that the 2 invoices have been placed on record by the complainant but the invoice pertaining to Radial tempo tyres 8.25R 16 PR is forged as radial tyres are not manufactured in China. Radial tyres are only manufactured in India. On 03.01.2023, the accused submitted that he does not wish to lead DE and statement to this effect was recorded.
MARILYN Digitally signed by MARILYN JOANNA JOANNA KHAKHA Date: 2024.11.26 KHAKHA 16:22:46 +0530 CC No. 13948/2019 Page No. 5/25
7. Pursuant to that, the present matter was put up for final arguments. Vide order dated 22.03.2023, this court invoked its powers under section 165 Cr.P.C. and allowed the document which is GST return pertaining to the invoice in question to be taken on record since the same was essential for a just decision of this case. Therefore, the same was taken on record.
Further, an opportunity was granted to Ld. counsel for the accused to cross-examine the complainant on the GST return qua the invoice.
8. CW-1 was further cross examined on 27.04.2023 and he placed on record 2 GSTRs which were exhibit CW-1/7(colly) along with certificate under Section 65B Indian Evidence Act. He stated that he does not file his GST returns personally and has engaged his CA to file the same. He admitted that the purchaser takes GST input against the GST deposited by the firm for the goods that are sold to him. He also said that the accused had taken GST input benefit of GST tax deposited by the complainant firm for a sum of Rs 46,331.25/- on a monthly basis. The accused also took GST input benefit against both the invoices in question. He stated that he does not know whether there were reverse entries in their GST returns for invoices cancelled against which GST has been deposited is taken or not. He was unable to explain the credit notes reflected in GSTR-9 for a sum of Rs.2,35,890.62/-. The credit notes are issued against some claims which were registered by the purchasers against the invoices issued by the complainant. He denied suggestions that the credit notes are against the unsold goods for which invoices were raised by the complainant. He denied suggestions that GST input of only one invoice was taken by the accused. He denied suggestions that though invoice number R-475 is fake.
Digitally signedMARILYN by MARILYN JOANNA JOANNA KHAKHA KHAKHA Date: 2024.11.26 16:22:53 +0530 CC No. 13948/2019 Page No. 6/25
9. An application under Section 311 Cr.P.C. was moved by the accused on 05.06.2023 and the same was allowed wide order dated 08.08.2023 wherein the accused was permitted to place on record his GST returns. DW-1, the accused, was examined on 25.09.2023 wherein he stated that he had previous business transactions with the company of the complainant that is Alliance Traders. It was mutually decided between them that subsequent goods would only be delivered if previous bills were cleared. Out of the 2 bills that the complainant had placed on record, DW-1 only admitted his liability qua the bill amounting to Rs.2,63,200/- but he stated that he did not owe any liability qua the bill amounting to Rs. 2,11,800/-. He stated that he never received any goods of the description Radial tempo tyres 8.25R16 16 PR and the claim of the complainant qua the said bill was false. He has also taken benefit of the GST input qua only the first bill amounting to Rs. 2,63,200/-. He stated that he had received the legal demand notice issued by the complainant to him. The cheque in question was handed over by him to the mediator of the complainant as security. He also brought his GSTR-3B of the financial year 2018-2019 supported by certificate under 65B of Indian Evidence Act. During his cross examination, he stated that he is running the business of tyres since the year 2014. He stated that he does not have any transactions with the father of the complainant. He stated he that he is not aware of entries stated 01.02.2019, 16.02.2019 and 20.02.2019 in his voucher register which is a part of Ex. DW1/A which shows his transactions with one company namely, Agarwal Tyres which was the proprietorship concern of the father of the complainant namely Sh. Kamlesh Kumar Agarwal. He denied suggestions that the bills were forged and fabricated. DW-1 was confronted tax invoice dated Digitally signed by MARILYN MARILYN JOANNA JOANNA KHAKHA Date: 2024.11.26 KHAKHA 16:23:01 +0530 CC No. 13948/2019 Page No. 7/25 27.03.2019 bearing invoice number 435 along with e-way bill details supported with certificate under section 65B of Indian Evidence Act and the same was Ex.DW-1/DX1 and his attention was drawn towards the fact that the same was billed by Aggarwal Tyres to one Rishabh Infrastructures as opposed to being a transaction with the accused company. The witness was asked as to what he wants to say about the bill and he stated that the bill is manipulated since invoice number 435 was issued by Agarwal tyres to him. He also produced bank statements with respect to the same. His bank statements revealed payments to Agarwal tyres dated 18.07.2018, 13.07.2018 and 13.03.2018 and the same was Ex. DW-1/B. He was asked whether he can produce the entire transaction pertaining to the entries of his voucher register pertaining to Aggarwal Tyres to which he stated that he cannot do the same due to lapse of time.
10.Vide order dated 21.10.2023, final arguments were advanced on behalf of both the parties and they submitted that they have no objection if the remaining part of the documents i.e., bank account statement of the accused and e-way bill of the complainant are taken on record. Accordingly, both parties were directed to file the same on next date of hearing. On 21.11.2023, bank statements from 01.01.2019 to 01.05.2019 of the accused were taken on record and considered to be a part of Ex. DW-1/B. On 04.03.2024, an application under Section 311 Cr.P.C. was filed on behalf of the complainant to place on record the e-way bill which gave rise to the invoices amounting to Rs.4,75,000/- being raised qua the accused and the same was allowed vide order dated 08.07.2024.
11.CW-1 was cross-examined on 22.10.2024 wherein he placed on record additional evidence by way of affidavit which was Ex. CW-1/B and the Digitally signed MARILYN by MARILYN JOANNA JOANNA KHAKHA CC No. 13948/2019 KHAKHA Date: 2024.11.26 Page No. 8/25 16:23:09 +0530 two e-way bills for both the invoices. During, his cross-examination dated 11.11.2024, CW-1 stated that e-way bills are generated by his accountant and the same are valid for 24 hours. If the goods mentioned on e-way bill are not delivered within 24 hours, then the e-way bill is renewed online by the concerned authorities. The goods supplied to the accused on both the invoices were dispatched from the godown of the complainant in Wazirabad to Bilaspur in Haryana. The distance from the godown of the complainant to the shop of the accused was around 50-60 kms approximately. He stated that one of the e-way bills was valid for a period of 3 days and the distance mentioned in the e-way bill was 210 kms. He stated that the calculation with respect to distance was generated automatically when you enter the location. He also stated that the other e- way bill has the distance mentioned as 80 kms. He denied suggestions of both the e-way bills being forged and fabricated. He denied suggestions that the goods mentioned in the e-way bill were never supplied to the accused. CW-1 mentioned that the accused had taken GST input for both the invoices. The description of the tyres was not mentioned on one of the e-way bills and he admitted the same. He explained that the HSN code mentioned on the e-way bill is sufficient to describe the tyres. Amended statement of accused Section 313 Cr.P.C. was recorded on the same day wherein the accused stated that the goods with respect to e-way bill dated 16.07.2018 have been received by him but he did not receive goods of e- way bill dated 26.02.2019.
Digitally signedMARILYN by MARILYN JOANNA JOANNA KHAKHA KHAKHA Date: 2024.11.26 16:23:16 +0530 CC No. 13948/2019 Page No. 9/25 ARGUMENTS ADVANCED BY PARTIES
12.Ld. counsel for complainant submits that, since the signatures on the cheque in question have been admitted by the accused, the statutory presumption lies in favour of the complainant. He submits that only one invoice, that is, R-475 is under challenge since the other invoice is admitted by the accused. However, no proof has been furnished by the accused to show that the goods were in fact not delivered to him though the burden is on him to prove such non-delivery of goods. The accused has produced his bank statement and ledger before this court to show that there was no outstanding liability qua invoice R-475 but the GST inputs have been taken by the accused for both the invoices raised against him. No witnesses have been produced before this court to prove that the cheque in question was given in blank signed condition. The document Ex. DW-1/A (colly) mentions Agarwal tyres as one of the companies with which the accused has carried out business which belongs to the father of the complainant. During his cross examination, DW-1 stated that did not have any transaction with the father of the complainant but the same has proven to be false which is why the testimony of DW-1 cannot be relied upon. Further, the complainant has produced bills of Agarwal tyres for the invoice number (invoice no. 435) mentioned in the GST returns of the accused and it shows that invoice number 435 is in fact issued in favour of one Rishabh Infrastructure and not the accused company. The entire GST input has not been placed on record by the accused which creates a doubt in the case of the accused since the portal is accessible to them and they have deliberately furnished their GST returns only in cumulative form. The bank entries of Digitally signed by MARILYN MARILYN JOANNA JOANNA KHAKHA Date: 2024.11.26 KHAKHA 16:23:24 +0530 CC No. 13948/2019 Page No. 10/25 Agarwal tyres filed by the accused are also false and fabricated and filed before this court to mislead the court. This puts questions with respect to the credibility of the documents produced by the accused in the present case and therefore, the accused has failed to provide any valid defense before this court.
13.Ld. Counsel for accused submits that the legal presumptions are rebuttable upon the standards of preponderance of probabilities. He submits that, while one of the invoices has specific description of the goods mentioned, the other e-way bill does not have any description which is why the same appears to be false and fabricated. The complainant himself has admitted that one employee with the surname Dutta was the intermediary between the complainant company and the accused which is what was the case of the accused as well. Further, the complainant has stated that there were multiple transactions between him and the accused but has not proved any other transaction apart from the transaction in question. Further, Chinese tyres are not available of the description that is mentioned in the second invoice which is why the same appears to be false and fabricated. The GSTR filed by the complainant mentions that accused took GST input against both the invoices but the credit notes also mentioned reverse entries of the taxes which have been concealed by the complainant. The father of the complainant was not examined by this court even though the invoices of his company were placed on record. These invoices have not been proved before this court since they were not brought by the father of the complainant. Further, the bank statement of the accused shows that the cheque was first presented on 02.02.2019 while the second invoice is MARILYN Digitally MARILYN signed by JOANNA Date: 2024.11.26 JOANNA KHAKHA KHAKHA 16:23:32 +0530 CC No. 13948/2019 Page No. 11/25 dated 26.02.2019 which is why it is not clear as to why though complainant would present a cheque for 2 invoices way before the second invoice has been raised. Further, the e-way bill is valid for 24 hours otherwise it has to be renewed. However, the e-way bill dated 19th February has been valid for a period of 3 days and it shows the distance between the godown of the complainant to the shop of the accused to be of 80 kilometres while the other e-way bill for the same shop shows that the distance between the same to be 210 kms. The same appears to be a false and fabricated e-way bill. Further, it is suspicious that the e-way bill has been filed at a very belated stage even though the complainant claims that he had access to the same way before that.
14.Ld. Counsel for accused has placed on record a compilation of the following judgments: Dashrathbhai Trikambhai Patel v. Hitesh Mahendranathbhai Patel and Anr. (2022)AIR(SC)4961, Saurabh Goyal v. Arun Goyal (2021)4LawHerald3519, Anu Tripathi v. Anil Kumar Gupta (2018)ACD547, M/s Kumar Exports v. Sharma Carpets 2009(1)R.C.R.(Criminal)478 and M.S. Narayana Menon v. State of Kerala 2006(3)SCC(Cri)30.
REASONING OF THIS COURT
15.As per the law pertaining to offences under Section 138 NI Act, the complainant must prove the following facts-
i) The accused issued a cheque on a bank account maintained by him;
ii) The said cheque must have been issued, wholly or partly, in discharge of a 'legal debt or other liability';
Digitally signed by MARILYN MARILYN JOANNA JOANNA KHAKHA CC No. 13948/2019 KHAKHA Date: 2024.11.26 Page No. 12/25 16:23:40 +0530
iii) The said cheque was presented before the bank within 3 months from the date of issuance and was dishonoured;
iv) The payee issued a legal demand notice, within 30 days of receipt of information of dishonour of the cheque;
v) The drawer failed to make payment within 15 days of receipt of the said legal demand notice.
16.Further, the NI Act raises two important legal presumption in favour of the holder of the cheque as soon as the execution of cheque is proved. Firstly, as per Section 118(a), NI Act, it shall be presumed that every negotiable instrument was 'made, accepted, transferred, negotiated or endorsed for consideration, unless the contrary is proved'. Secondly, as per section 139, NI Act, it shall be presumed that 'the holder of cheque, received the cheque for the discharge, in whole or in part, of any debt or other liability, unless the contrary is proved.'
17.The principle with respect to above mentioned presumptions, have been laid down in Para 25 of the judgment by Hon'ble apex court in Basalingappa v. Mudibasappa (2019) 5 SCC 418, which lays down as under-
i. "25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
ii. 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the Digitally signed by MARILYN MARILYN JOANNA KHAKHA CC No. 13948/2019 JOANNA KHAKHA Date:
2024.11.26 Page No. 13/25 16:23:47 +0530 accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
iii. 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. 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 they rely.
iv. 25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden."
18.Section 118 NI Act raises the following rebuttable presumptions about the cheque in question in favour of the payee.
These are--
1. Cheque was made or drawn for consideration.
2. Cheque was drawn on the date mentioned on cheque.
3. Cheque was delivered to payee after its date and before maturity.
4. Cheque, if transferred to holder in due course, was transferred before maturity.
5. Cheque, if needed, was duly stamped.
6. Holder of the cheque is a holder in due course.
19.The issue to be determined by this court is whether the cheque in question was given by the accused to the complainant against any 'Legal Debt or Other Liability'. It is pertinent to mention here that the accused has Digitally signed by MARILYN MARILYN JOANNA JOANNA KHAKHA Date: 2024.11.26 KHAKHA 16:23:54 +0530 CC No. 13948/2019 Page No. 14/25 admitted his signatures on the cheque in question at the stage of framing of notice and subsequently as well. As per the law laid down by the Hon'ble apex court in Basilingappa (supra), once the execution of the cheque is admitted, the presumption that the cheque in question was executed in discharge of a debt or other liability gets attracted by virtue of the mandate of Section 139, NI Act. Once the above stated presumption is raised, the onus shifts on the accused to raise a probable defence. The signatures of the accused are not disputed on the cheque in question in the present case. Based on the legal position mentioned, the burden lies on the accused to prove that the cheque in question had not been issued in discharge of a legally enforceable debt or liability on the standard of preponderance of probabilities. Accused was at liberty to rebut these presumptions by way of cross examination of complainant and his witnesses or by leading substantive evidence in defence. It is required that such evidence must be brought in defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'. Presumption must be rebutted by 'proof' and not by a bare explanation which is merely plausible.
20.The stand taken by the accused shall be examined to determine if the accused could raise a probable defence on the touchstone of benchmark set in the judgment as held by Hon'ble Supreme Court of India in Kumar Exports vs. Sharma Carpets (2009)2 SCC 513, wherein the Hon'ble Apex Court had held as follows: "The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the MARILYN Digitally MARILYN signed by JOANNA Date: 2024.11.26 JOANNA KHAKHA KHAKHA 16:24:01 +0530 CC No. 13948/2019 Page No. 15/25 case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant."
21.The first point of defence raised by Ld. Counsel for the accused is that invoice R-475 which is a part of Ex. CW1/1 (Colly) and its e-way bill no. 781057990527 are false and fabricated documents which is why the legal liability in the present case is less than the cheque amount. A few arguments have been made in order to elaborate upon this submission:
(i) The invoice R-475 that has been filed by the complainant does not bear the specific description of the goods that have been sold by the complainant company to the accused.
(ii)The complainant used to supply Chinese tyres to the accused company and the tyres allegedly supplied i.e., radial tyres are not manufactured by Digitally signed Chinese companies but Indian companies. MARILYN by MARILYN JOANNA JOANNA KHAKHA KHAKHA Date: 2024.11.26 16:24:08 +0530 CC No. 13948/2019 Page No. 16/25
(iii)The complainant himself stated that the e-way bill generated is valid for 24 hours while the e-way bill generated for the invoice was valid for 3 days.
(iv) The complainant in his cross-examination stated that the distance between the godown of the complainant and the shop of the accused is about 90 kms while the distance mentioned on the way bill is 210 kms.
(v) The e-way bill has been produced at a very belated stage which creates doubt upon the authenticity of the e-way bill.
22.This court will first delve with point (i) of para 21. From the perusal of R- 475 which is a part of Ex. CW-1/1, it is evident that the description of the goods allegedly procured is "radial tempo tyre 8.25R16 16PR" and the quantity of the same is 40 pieces. It is evident that there is no ambiguity pertaining to the description of the goods. The e-way bill of this invoice bearing no. 781057990527 bears the product name and description as "&tyre". As correctly pointed out, the description is ambiguous even though the quantity of the goods allegedly procured is correct and matches the invoice. However, when questions pertaining to ambiguity in the description was put to CW-1, he stated that the HSN Code makes it evident as to what were was the description of the goods that were supplied to the accused. Therefore, no reasonable doubt has been created with respect to the case of the complainant on the point that the description of the goods procured via invoice no. R-475 are ambiguous.
23. This court now delve into point (ii) of para 21. It is the case of the accused that there are no radial tempo tyres of the description mentioned in the invoice since these tyres are not manufactured by Chinese Companies. CW-1 during his cross-examination has admitted that he used Digitally signed MARILYN by MARILYN JOANNA JOANNA KHAKHA KHAKHA Date:
CC No. 13948/2019 2024.11.26 16:24:17 +0530 Page No. 17/25 to supply tyres manufactured of Chinese Companies to the accused. However, the goods mentioned in invoice R-475 are not manufactured by Chinese Companies. Ld. Counsel for accused submits that only Indian companies manufacture Radial Tempo Tyres. However, no such evidence has been placed on record by the accused to prove this fact. Merely submitting that Radial Tempo Tyres are not manufactured by Chinese Companies is not sufficient in the opinion of this court. Either Ld. Counsel for accused should have placed on record the relevant data pertaining to this to create a doubt in the case of the complainant or he could have confronted this fact to CW-1. Neither of the two options were resorted to, which is why, no reasonable doubt has been created in the case of the complainant on this point.
24.This court now delve into point (iii) of para 21. It is the case of the accused that the complainant himself has admitted that e-way bills are admitted for 24 hours while the validity of e-way bill no. 781057990527 is shown to be of three days. No reasonable explanation has been provided as to why the validity of the same extends up to three days. However, this in itself does not prove that the e-way bill was forged and fabricated and therefore, no reasonable doubt has been created in the case of the complainant based on this point.
25.This court now delve into point (iv) of para 21. Ld. counsel for accused submits that the distance between the godown of the complainant and the shop of the accused is stated to be 210 kms in Ex. CW-1/8 while the same has been stated to be 80 kms in e-way bill no. 781057990527. The same appears to be a plausible defence since both the invoices were raised on the accused and the complainant himself has admitted in his cross-
Digitally signed MARILYN by MARILYN JOANNA JOANNA KHAKHA CC No. 13948/2019 KHAKHA Date: 2024.11.26 Page No. 18/25 16:24:24 +0530
examination that the distance between his godown and the shop of the accused is about 50-60 kms approximately. When the difference in distance mentioned in the two e-way bills was put to the complainant, he stated that the same was automatically generated when he put the location. However, this court does not find his response to be satisfactory and the fact that the two e-way bills generated for goods supplied to the same destination are showing different distances creates a reasonable doubt as to the authenticity of the e-way bills placed on record before this court.
26.This court now delve into point (v) of para 21. This court is of the opinion that no adverse inference can be drawn against the complainant merely on the ground that the e-way bills were placed on record at a belated stage. However, since a reasonable doubt has been created qua the authenticity of invoice R-475 and its e-way bill (as discussed in para 25), this court is of the opinion that the legally recoverable debt in the present case only pertains to invoice R-259 and not R-475. This implies that the legally recoverable debt is less than the cheque amount and therefore, the cheque in question could not have been presented on 01.02.2019 for Rs. 4,75,000/-.
27.In relation to this, the court relies upon M/s Alliance Infrastructure Project Pvt. Ltd. and Ors. v. Vinay Mittal Crl. M.C. No.2224/2009 where the Hon'ble High Court had held that "If it is held that the expression "amount of money" would necessarily mean the amount of cheque in every case, the drawer of the cheque would be required to make arrangement for more than the admitted amount payable by him to the payee of the cheque. In case he is not able to make arrangement for the Digitally signed MARILYN by MARILYN JOANNA CC No. 13948/2019 JOANNA KHAKHA Page No. 19/25 KHAKHA Date: 2024.11.26 16:24:32 +0530 whole of the amount of the cheque, he would be guilty of the offence punishable under Section 138 of Negotiable Instruments Act. Obviously this could not have been the intention of the legislature to make a person liable to punishment even if he has made arrangements necessary for payment of the amount which is actually payable by him. If the drawer of the cheque is made to pay more than the amount actually payable by him, the inevitable result would be that he will have to chase the payee of the cheque to recover the excess amount paid by him. Therefore, I find it difficult to take the view that even if the admitted liability of the drawer of the cheque has got reduced, on account of certain payments made after issue of cheque, the payee would nevertheless be entitled to present the cheque for the whole of the amount, to the banker of the drawer, for encashment and in case such a cheque is dishonoured for wants of funds, he will be guilty of offence punishable under Section 138 of Negotiable Instrument Act."
28.This court is also relying upon the Hon'ble Supreme court case, Dashratbhai Trikambhai Patel v. Hitesh Mahendrabhai patel and others, Crl A.No 1497/2022 wherein it was held that"If there has been a material change in the circumstance such that the sum in the cheque does not represent a legally enforceable debt at the time of maturity or encashment, then the offence under Section 138 is not made out." The same applies to the case at hand where the legal liability was less than the cheque amount and therefore, the offence under Section 138 N.I. Act is not made out in the present case in the opinion of this court. Since a reasonable doubt has been created with respect to the authenticity of one Digitally signed by MARILYN MARILYN JOANNA JOANNA KHAKHA Date: 2024.11.26 KHAKHA 16:24:41 +0530 CC No. 13948/2019 Page No. 20/25 of the invoices furnished by the complainant, the burden now shifts on the complainant to prove the authenticity of that invoice beyond reasonable doubt.
29.The second point of defence raised by Ld. Counsel for accused is that a reasonable doubt has been created in the case of the accused since the bank statement furnished by the accused shows that the cheque in question was first presented on 02.02.2019 while the second invoice was generated on 16.02.2019. To establish the same, the accused has filed the bank statement of his current account from 01.01.2019 to 10.03.2019 which was later taken on record and annexed with Ex. DW- 1/B vide order dated 21.11.2023 wherein, as per entry dated 02.02.2019, the cheque in question was presented by Alliance Traders for Rs. 4,75,000/- but the same was returned since there were no funds available. The same cheque was then again presented on 28.02.2019 and was returned with the remarks "funds insufficient" and the dishonour memo pertaining to which is Ex. CW1/3. No reasonable explanation has been provided by the complainant for why the cheque in question was presented for the cheque amount even before the second invoice was generated and before the entire alleged liability of Rs. 4,75,000/- had arisen. This creates a reasonable doubt with respect to the case of the complainant since the complainant, throughout the trial, has emphasised time and again that there were 2 invoices instead of one but a cheque of Rs.4,75,000/- was presented even before the entire liability of the cheque amount had arisen qua the accused in the present case. Basis this submission, this court is inclined to rely upon the version of facts presented by the accused and is of the opinion that a reasonable doubt has Digitally signed by MARILYN MARILYN JOANNA JOANNA KHAKHA Date: 2024.11.26 KHAKHA 16:24:49 +0530 CC No. 13948/2019 Page No. 21/25 been created in the case of the complainant since a cheque of Rs. 4,75,000/- has been presented even before the second invoice pertaining to the alleged legal liability was issued.
30.The third point of defence raised by Ld. Counsel the legal demand notice is defective since the demand for payment has been made for an amount more than the legally recoverable debt. With respect to legal notice being invalid in the present case, this court is relying upon the case Suman Sethi v. Ajay K. Churiwal And Another, AIR 2000 SC 828 where the Hon'ble Supreme Court has held that object of the notice is to give a chance to the drawer of the cheque to rectify his omission. The accused/drawer of the cheque is absolved from the criminal liability if he makes the payment of the cheque amount i.e. said amount within stipulated period of 15 days from the date of receipt of notice. If in the legal demand notice, more than the amount due is demanded or the cheque amount is not demanded, that would not advance the legislative intent. The purpose of giving the accused notice prior to filing of complaint case under Section 138 of NI Act is to give him an opportunity to make the payment of the cheque amount. Further, the Hon'ble Court in M/s Alliance Infrastructure Project Pvt. Ltd. and Ors (supra) also observed that, when the legal demand notice is sent for demand of the excess amount, such a notice cannot be said to be a legal and valid notice envisaged in Section 138(b) of NI Act. In order to make the notice legal and valid, the court specified that it must necessarily specify the principal amount payable to the payee of the cheque and the principal amount demanded should not be more than the actual amount payable by him.
MARILYN Digitally
MARILYN
signed by
JOANNA Date: 2024.11.26
JOANNA KHAKHA
KHAKHA 16:24:55 +0530
CC No. 13948/2019 Page No. 22/25
Therefore, even the legal notice dated 20.03.2019 becomes invalid in the present case.
31.Since a reasonable doubt has been created in the case of the complainant, the burden now shifts upon the complainant to prove his case beyond reasonable doubt. To establish this, the complainant has placed on record the GST returns of the complainant wherein it can be seen that the accused has availed GST input for both the invoices. However, during cross-examination of CW-1, when questions were put on the credit notes of these GST returns, CW-1 was unable to explain the same. Further, there are also reverse entries pertaining to the invoices raised by the complainant. However, CW-1 was not able to explain if the reverse entries were pertaining to the invoices of the accused company or not. In such a scenerio, the GST returns in themselves are not sufficient to prove the authenticity of the invoices i.e. Ex. CW1/1 (colly) beyond reasonable doubt. This court is of the opinion tha,t since there has been a lack of explanation with respect to why the cheque in question was presented even before the liability qua R-475 had arisen, the complainant has failed to prove his case beyond reasonable doubt. Furhter, the authenticity of the e-way bills produced before this court are also under question and no witnesses have been examined to further prove their authenticity beyond reasonable doubt. In such a circumstances, this court is not inclined to grant any relief to the complainant.
CONCLUSION
MARILYN Digitally
MARILYN
signed by
JOANNA JOANNA KHAKHA
Date: 2024.11.26
KHAKHA 16:25:02 +0530
CC No. 13948/2019 Page No. 23/25
32.In view of the above discussion, the cheque in question and the legal demand notice, were both - made/presented within the stipulated period and upon non-payment of the cheque amount by the accused after receiving the legal notice, the matter was instituted within limitation.
33.Consequently, the burden was on the accused to create a reasonable doubt in the case of the complainant. By challenging the authenticity of the invoice R-475 and its e-way bill, the accused has been able to successfully demonstrate that the legal liability qua the complainant was of an amount less than the cheque amount. Further, a reasonable doubt has been created in the case of the complainant since the cheque in question was presented prior to the invoice R-475 which means it was presented prior to the liability of Rs. 4,75,000/- arising in the present case. Lastly, the legal demand notice was also defective since the amount demanded was less than the amount due.
34.Thus, on account of the appreciation of fact, evidence and materials on record, this court is of the considered opinion that the accused has succeeded in creating a reasonable doubt in the case of the complainant. Consequently, the accused JMK Tyres through its properitor Arun Kumar is hereby acquitted for the offence punishable u/s 138 NI Act qua the cheque in the present case.
35.This judgment contains 25 pages. This judgment has been pronounced by the undersigned in the open court and each page bears the signatures of the undersigned.
Digitally signedMARILYN by MARILYN JOANNA JOANNA KHAKHA KHAKHA Date: 2024.11.26 16:25:12 +0530 CC No. 13948/2019 Page No. 24/25
36.Let a copy of the judgment be uploaded on the official website of District Courts, Dwarka forthwith. Digitally signed MARILYN by MARILYN JOANNA JOANNA KHAKHA KHAKHA Date: 2024.11.26 ANNOUNCED IN THE OPEN 16:25:19 +0530 COURT ON 26th November, 2024. Marilyn Joanna Khakha MM NI ACT-06/South-
West District/ Dwarka Courts/New Delhi 26.11.2024 CC No. 13948/2019 Page No. 25/25