Delhi District Court
"... ... ... The Bare Denial Of The ... vs . on 28 January, 2014
IN THE COURT OF SHRI PUNEET PAHWA
METROPOLITAN MAGISTRATE 01 (N.I. ACT)
PATIALA HOUSE COURTS : NEW DELHI
M/s Bansal Traders
RZ2921/33, Jagdama Road,
Tughlakabad Extn., New Delhi110019
Through its proprietor Mr. B.S. Bansal
........ Complainant
Vs.
1.M/s A.K. Agencies, TA178/3, Tughlakabad Extn.
New Delhi110019 Through its proprietor
2. Sh. Amit Gupta Proprietor, M/s A.K. Agencies, TA178/3, Tughlakabad Extn.
New Delhi110019
3. M/s Nuzen Harbal Pvt. Ltd.
LB4, Arunachala Building, 19, Barakhamba Road, Connaught Place, New Delhi - 110001 Through its Chairman & Managing Director ........ Accused Persons Case No. 97/1 Page No. 1 of 14 Case Number. : 97/1 Date of Institution of Present Case. : 14.03.2013 Offence Complained Of. : U/s 138 NI Act Plea of the Accused. : Not Guilty Arguments Heard On. : 17.01.2014 Final Order. : Convicted Date of Judgment. : 28.01.2014
- :: JUDGMENT ::
1. Vide this judgment, I shall dispose off the present complaint filed by the complainant u/s 138 Negotiable Instrument Act, 1881 (hereinafter referred to as the "NI Act").
2. As per averments made by the complainant in his complaint, the brief facts of the case are that the complainant is the sole proprietor of complainant firm M/s Bansal Traders and he was appointed as distributor by Case No. 97/1 Page No. 2 of 14 accused no. 3. At the time of taking distributorship, accused no. 3 had assured the complainant to give full cooperation for procuring orders for the complainant. On the basis of this assurance, the complainant took distributorship of accused no. 3 and made payment of Rs. 1,00,000/ in advance to accused no. 3. When the complainant came to know that accused no. 3 had never placed any order to any sales person for the complainant, the complainant requested accused no. 3 to take back their stock and make the payment of same to the complainant. As per the instructions of accused no. 3, the complainant transferred the goods/products lying with him to accused no. 1 and 2 vide invoice dated 14.12.2012 amounting to Rs. 48,526/. The accused no. 1 is proprietorship firm and accused no. 2 is the proprietor of the same and to clear the said legal liability/debt, the accused no. 1 and 2 issued a cheque bearing No. 000007 dated 04.01.2013 drawn on DCB Bank Ltd., Greater Kailash, New Delhi in favour of the complainant. The invoice dated 14.12.2012 is Ex. CW1/A and cheque issued by the accused is Ex. CW1/B. When the said cheque was presented by the Case No. 97/1 Page No. 3 of 14 complainant in his bank, the same was returned back unpaid with the remarks "Payment stopped by the drawer". The said intimation was received by the complainant vide bank memo dated 05.01.2013 which is Ex. CW1/C. Thereafter, the complainant issued a legal notice through his lawyer demanding the payment of said cheque amount from the accused. The said notice was sent on 31.01.2013 through speed post and courier and same was duly served upon the accused as alleged by the complainant. The accused failed to make the payment of the dishonoured cheque to the complainant within 15 days from the receipt of the notice. Accused no. 2 has also replied to the notice issued by the complainant. Photocopy of the legal notice is Ex. CW1/D, postal receipts are Ex. CW1/E to Ex. CW1/G, track reports of the posts are Ex. CW1/H to Ex. CW1/J and reply to notice is CW1/L. Since accused failed to make the payment of the cheque amount despite service of notice upon him, the complainant filed the present complaint which is Ex. CW1/K.
3. On finding a prima facie case against them, all Case No. 97/1 Page No. 4 of 14 the accused were summoned vide order dated 18.01.2013, however, the complainant dropped the accused no. 3 from the array of the parties vide his statement dated 03.05.2013.
4. Consequent to the service of summons, accused no. 2 entered his appearance and was admitted to bail. Vide order dated 03.05.2013, notices U/s 251 Cr.P.C. were framed against the accused no. 1 and 2 to which they pleaded not guilty and claimed trial. The basic plea of defence of the accused was that the cheque in question was given to accused no. 3 i.e. M/s Nuzen Herbal Pvt. Ltd. as a security cheque on the condition that same would be encashed only once the goods lying with the accused no. 2 would be sold. Accused no. 2 had accepted that he had received the legal demand notice and had also replied to the same.
5. After framing of notice, the complainant was asked to lead evidence to prove his case. In his evidence, the complainant deposed as CW1 and adopted the evidence led by him at the presummoning stage. His affidavit is Ex. CW1/M. In his affidavit he has fully corroborated the Case No. 97/1 Page No. 5 of 14 averments made by him in his complaint.
6. Nothing contrary came out from the cross examination of the complainant as in his crossexamination also he had fully corroborated his case.
7. Statement of accused U/s 313 Cr.P.C was recorded vide which he had alleged that said cheque was given as a security only on the assurance of one Mr. Shukla, who was the authorized signatory of accused no. 3 and who signed the distributionship agreement.
8. In his defence, the accused no. 2 himself stood in the witness box and deposed as DW1. In his defence as DW1, accused has stated that the cheque was given to Mr. Shukla as security cheque and it was given on assurance that when the material would be sold, cheque would be handed over to the complainant. But, on 04.01.2013, he came to know that the cheque was handed over to the concerned trader i.e. the complainant. He further deposed that since the stock was still lying with him, he had stopped the payment of the cheque. In his evidence, the accused has admitted that he had received the legal notice issued by the Case No. 97/1 Page No. 6 of 14 complainant and has also agreed to pay the amount of which the stocks already sold by him.
9. In his crossexamination also, accused has admitted that he received the stock/material from the concerned trader through the invoice and he had issued the cheque in the name of Bansal Traders. He has further admitted that he has always dealt with the company and took the stock/material from them by paying the amount through cheques and drafts and already paid the amount to them after receiving the goods. He further admitted that he has taken the goods of Rs. 4,04,715 from them.
10. I have perused the record and heard the arguments put forth by the Ld. Counsel for the parties.
11. Ld. Counsel for the complainant has argued that the complainant has fully proved his case and all the ingredients which establish the offence U/s 138 NI Act have been proved beyond reasonable doubt and moreover there are presumptions in favour of the complainant as permitted under the law and, therefore, onus is on the accused to rebut the case of the complainant. He further argued that the Case No. 97/1 Page No. 7 of 14 accused has failed to rebut the presumptions imposed by law against the accused.
12. On the other hand, Ld. Counsel for accused has argued that cheque was handed over to Mr. Shukla who was representative of the accused no. 3 company and said cheque was handed over as a security cheque which was to be encashed only after the sale of entire goods. Ld. Counsel for accused further argued that when the cheque was presented to the bank by the complainant, there was sufficient funds in the account of the accused which shows that accused had no intention to commit the offence. He further argued that to attract the provisions of Section 138 NI Act, the cheque must be issued in discharge of some legal debt or liability and since the cheque was handed over to the company as a security cheque and also since the goods are still lying with the accused, no debt or liability arose towards the complainant. He submitted that the goods were not purchased by accused no. 1 & 2 but the same were transferred by the complainant on the behest of the accused no. 3 and it was the liability of the said accused no. 3 Case No. 97/1 Page No. 8 of 14 towards the complainant and not that of accused no. 1 and 2. Ld. Counsel for accused has further argued that since the accused had accepted those goods under undue influence and no agreement was entered into between the complainant and the accused, sale was not effected and therefore accused was not liable to make any payment to the complainant.
13. Bare perusal of Section 138 of the NI Act clarifies that five essential ingredients for completing the offence under Section 138 of the Act are as below:
i. Drawing of the cheque, ii. Presentation of the cheque with the bank, iii. Returning of the cheque unpaid by the drawee bank, iv. Giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, and v. failure of the drawer to make payment within 15 days of the receipt of the notice.
14. Now, so far as the aforesaid ingredients are concerned, the evidence of the complainant has gone un rebutted. It has not been disputed by the accused that the Case No. 97/1 Page No. 9 of 14 cheque in question was not issued by him. Moreover, the presentation of the cheque with the bank and returning of the cheque unpaid by the drawee bank has also been substantially proved by the complainant. Service of legal notice demanding the payment of cheque amount has also not been disputed by the accused. Rather, the accused has duly replied the said notice. The reply of the accused is Ex. CW1/L. It has also been proved that the accused has failed to make the payment of the cheque amount within 15 days of the notice.
15. It is pertinent to mention here that there are two presumptions of law as mandated by the Negotiable Instruments Act. According to Section 118 (a) of the Act, it shall be presumed that every negotiable instrument was made or drawn for consideration. By virtue of this clause, the Court is obliged to presume that the promissory note was made for consideration or until the contrary is proved. In Mallavarapu Kasivisweswara Rao Vs. Thadikonda Ramulu Firm and Others AIR 2008 SC 2898 it was held as under: Case No. 97/1 Page No. 10 of 14 "... ... ... The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its nonexistence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist...."
16. According to Section 139 of NI Act "it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque for discharge in whole or in part, of any debt or other liability." Under Section 139 NI Act there is a legal presumption that the cheque was issued for discharging a liability and that presumption can be rebutted only by the person who drew the cheque. This presumption can be rebutted by the accused by adducing evidence. So the burden of proof is on the accused.
17. In Hiten P. Dalal Vs. Bratindranath Banerjee AIR 2010 SC 1898 it was held as under: "The words 'unless the contrary is proved' which occur in this provision (Section 139) make it clear that the presumption has to be rebutted by 'proof' and not by a bare Case No. 97/1 Page No. 11 of 14 explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted......"
18. The only defence put forth by the accused is that the cheque in question was issued by him to accused no. 3 as a security cheque on the condition that same would be encashable only once the goods lying with him would be sold. From this defence, it is clear that the complainant had supplied the goods to the accused no. 1 and 2 and same were accepted by the accused no. 1. Though, during his deposition, accused no. 1 has submitted that he had accepted the goods under coercion, but he has failed to show or bring anything on record to show as to what steps he had taken or what communication he had made to accused no. 3 with regard to the supply of goods by the complainant to him. Mere averments made by the accused that he had accepted the accused under coercion does not discharge him from the onus of rebutting presumptions imposed upon him by the Case No. 97/1 Page No. 12 of 14 law.
19. Although, it is the defence of the accused that the said cheque was issued as a security cheque, but he has failed to prove the same. In fact, in his crossexamination, accused no. 1 has admitted that the stock/material was received by him from the complainant through invoice which is Ex. CW1/A and cheque was issued in the name of Bansal Traders i.e. the complainant. He has further admitted that he has also paid the amount to them after receiving the goods. He has further admitted that he has taken the goods of Rs. 4,04,715/from them.
20. Therefore, from the evidence of the complainant and also from the evidence of the accused, it is clear that the cheque was issued in discharge of legal debt or liability and accused has failed to rebut the presumptions imposed on him by sections 118 and 139 of NI Act.
21. FINAL ORDER: In view of the above mentioned observations, all the ingredients of the offence u/s 138 NI Act are squarely made out in the present case. The complainant has Case No. 97/1 Page No. 13 of 14 successfully discharged its burden of proving its case whereas the accused failed to rebut the presumption that the cheque in question was not issued towards a legally recoverable debt or liability and that the legal notice u/s 138 NI Act was never received by him. In view of the evidence and arguments of both the parties, the accused is hereby convicted u/s 138 NI Act .
Announced in the open Court on 28th January, 2014 (PUNEET PAHWA) MM (NI ACT1) PATIALA HOUSE COURTS NEW DELHI Case No. 97/1 Page No. 14 of 14 CC No. 97/1 28.01.2014 Present: Sh. R.K. Garg, Counsel for the complainant along with complainant in person.
Sh. J.K. Rawal, Counsel for the accused along with accused in person.
Vide my separate judgment of even date dictated and announced in the open Court, the accused has been convicted for the offence u/s 138 NI Act.
Put up for arguments/orders on the point of sentence on 01.03.2014 at 2.00 PM.
(PUNEET PAHWA) MM(NI ACT)/PHC/ND 28.01.2014 Case No. 97/1 Page No. 15 of 14