Delhi District Court
M/S. Flair Pen Limited vs . M/S Bee Ess Marketing And Another on 8 April, 2010
:1:
IN THE COURT OF MS. RAVINDER BEDI : M.M. /ASCJ / JSCC /
GUARDIAN JUDGE (SOUTH): PATIALA HOUSE COURTS, NEW
DELHI
M/s. Flair Pen Limited Vs. M/s Bee Ess Marketing and another
CC NO. 780/1/09
U/s 138 N.I. Act
JUDGMENT
(a) The Serial number of the case : 780/1/09
(b) The date of the commission of the offence : 11.8.05
(c)The name of the complainant : M/s Flair Pen Ltd.
65,Ground Floor,Rani Jhansi Road, New Delhi Also at:
Geetanjali Enclave New Delhi Head Office at:-
63, B/C Government Industrial Estate, Charkop , Kandiwali (West) Mumbail-400067 Through its Authorized Representative Mr. Surender.
(d) The name of the accused persons, and his parentage & residential address :(1)M/S Bee Ess Marketing 542/8, Bazar Shatrain Katra Karam Singh Amritsar (Punjab) -143001 (2)Sh. Barinder Singh, Partner M/S Bee Ess Marketing 542/8, Bazar Shatrain Katra Karam Singh Amritsar (Punjab) -143001
(e) The offence complained of or proved : U/S 138 N.I. Act :2:
(f) The plea of the accused : Pleaded not guilty
(g) The Final Order : Convicted
(h) The date of order : 1.4.2010 Facts as borne out from the complaint are as follows:
1. The case set up by complainant company is that it is is engaged in the business of 'writing pens'. The accused persons in discharge of its liability towards the payment, had issued cheque No. 483933 dated 08.08.05 of Rs. 1,10,412/- drawn on State Bank of India, Katra Khazana, Amritsar143001, which was returned unpaid on presentation by the drawer banks for "Funds Insufficient"
vide return memo dated 11.08.05. The complainant made a demand for the payment of the said amount of money by giving a demand notice dated 17.08.05 to accused through registered A.D, courier and postal receipt. Statutory notice of demand was duly served upon accused but accused failed to make the payment of the said amount to complainant within 15 days of receipt of the said Demand Notice. Thereafter the complainant has filed this complaint U/S 138 of Negotiable Instrument Act, 1881 (hereinafter " the Act") against the accused.
2. On 05.09.05 the Court took cognizance of the offence U/s 138 of the Act. On being satisfied that the complainant has a Prima Facie case against the accused persons the Court summoned the accused for offence U/s 138 of the Act. On 05.12.05, as a partner to accused No. 1 firm, accused No. 2 appeared pursuant to the summons issued by the Court and was admitted to bail.
3. On 4.10.2006 the particulars of the offence were read over and explained to the accused in simple Hindi, to which he pleaded not guilty and claimed trial.
4. In order to substantiate its case, the complainant examined CW 1 Shri Surender Bhogal, the Authorized Representative of :3: complainant who has deposed vide affidavit. CW2 is Sh. Shyam Kumar, the employee of the complainant company.
5. All the circumstances appearing in the evidence against the accused were put in order to enable him to offer his explanation.
6. In his examination U/s 313 Cr.P.C, the accused has submitted that the cheque in question was a blank cheque and was given to the complaint as security in 2001. He further submitted that he has no liability on the date on which cheque was presented for encashment. He has opted to lead evidence in defence and has examined DW1 Sh. Narender Singh, Assistant Manager, State Bank of India, SARC Amritsar, Punjab.
7. I have heard learned counsels for parties and have perused the relevant statutory provisions. Before looking into the factual issues involved herein, let us consider the provisions of Section 138 of Act. The requirements are :
(1) there is a legally enforceable debt (2) the drawer of the cheque issued the cheque to satisfy the whole or the part of the debt (3) the cheque so issued has been returned due to insufficiency of funds.
8. Section 138 of the Act merely raises a presumption in regard to the second aspect of the matter. The existence of legally recoverable debt is not a matter of presumption U/S 139 of the Act. The accused can prove the non existence of consideration by raising a probable defence and if he has proved, only then the onus would shift upon complainant, who has to prove it as a matter of fact and on his failure to prove would dis-entitle him to grant the relief. In K. Bhaskaran Vs. Sankaran Vaidhyan Balan; AIR 1999 Supreme Court 3762; it was observed that as the signature in the cheque is admitted to be that of the accused, the presumption envisaged in :4: Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden is on the accused to rebut the aforesaid presumption.
9. In Hiten P. Dalal Vs. Bratindranath Banerjee; AIR 2001 Supreme Court 3897; Hon'ble Supreme Court observed that the appellant's submission that the cheques were not drawn for the 'discharge in whole or in the part of any debt or other liability's is answered by the third presumption available to the Banks U/S 139 of the Negotiable Instruments Act. This section provides that "it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability." The effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability.
10. The provisions make it clear that the presumption has to be rebutted by ''proof" and not by a bare explanation which is merely plausible. It was so held in Dhanwantrai Balwantrai Desai Vs. State of Maharastra, AIR 1964, SC 575.
11. From the aforestated settled legal principles, it is crystal clear that Section 118 of the Act envisages legal presumption that the cheque was drawn for consideration on the date which the cheque bears. This presumption is rebuttable but the burden of proving that the cheque was not issued for a debt or liability is on the accused. The accused must adduce evidence showing the reasonable possibility of non existence of the Presumed Fact.
:5:12. In his pursuit to knock down the edifice of the complainant case, defence has argued with vehemence that the account of the accused was already closed even before 22.1.2005 and there was no transaction from the account after 29.12.2004. Ld. counsel has referred to the reply to the statutory notice sent by accused and has submitted that the complainant has managed to obtain the endorsement of remarks of "Insufficient Funds" from the bankers in connivance with the bank officials as the account was closed much before the date on the cheque. It is further argued that no oral or documentary evidence is produced by complainant of any purchase by accused at any point of time.
13. It is further the contention of defence that the complaint filed by the complainant company is bad in law as CW1 is not authorized by any authorization letter to present the complaint on behalf of company. It is argued that even the legal notice received by the accused does not show the name of the person authorized by complainant company to send such notice. Reliance is placed on the authority rendered in 2007 CC (HC) 66.
14. Per contra, it is argued by counsel for complainant that from evidence, complainant has proved that the cheque in question was signed by accused which was dishonoured vide memo and despite service of legal notice, accused did not make payment. It is argued that during cross of complainant's witnesses, nothing material has come out and the complainant has been able to prove his case. It is argued that accused has failed to discharge the burden cast upon him to rebut the presumption in favour of complainant under the provisions of NI Act.
15. Now the question is whether the complainant has proved to the hilt, that whether the amount was legally enforceable debt. I have analysed the deposition of witnesses of complainant. Having considered the testimonies, the issuance of cheque is not in dispute :6: but the contention of defence is that the cheque was issued by accused as alleged as a security, which was dishonoured for the reasons of Insufficiency of Funds. Admittedly, the accused is served with a notice through registered AD within the stipulated time and despite that no payment has been made by him.
16. Adverting to the contention of defence that the cheque in question was issued as a security in 2001 and as such there was no liability on the date when it was presented, I find the matter is covered squarely by the judgment of Hon'ble Apex Court in ICD Ltd Vs. Beena Shabeer 2004 (9) JT 558, where the similar question came up for consideration wherein cheque was issued as security. The court rejected the contention that matter is not covered by Section 138 NI Act. It was held that liability cannot be avoided in the event cheque is returned unpaid. So in the light of the legal position laid down in the Judgment ICD Ltd Vs. Beena Shabeer (supra) the accused cannot avoid the liability only on the ground that the cheque was issued as security and matter thus is not covered by the provisions of Section 138 NI Act.
17. I have considered the respective submissions of the parties in the light of the judgments relied upon by parties. In the present case, once the accused has taken a definite stand of issuance impugned cheque as security through employee of complainant company at the time of accepting the distributorship of complainant company, it was for him to rebut the said presumption by reliable and cogent evidence. The suggestion given by the accused to the complainant that cheque was issued as security has been denied by him. No positive evidence has been led by the accused to disprove this assertion. The defence witness DW1 has also rather admitted the issuance of memo Ex.CW1/B from their branch at Amritsar. The burden was upon accused to bring the evidence supporting the contention of producing the fake memo and the endorsement of "insufficient funds". The accused has failed to discharge that onus :7: and therefore the authority relied by defence as cited in 2006 VI AD (SC) 101 is not applicable to the present factual matrix.
18. So far the contention of defence regarding the absence of authorization concerns, it is held in catena of decisions that the complaint cannot be dismissed on account of non filing of such resolution/authorization. (M/s M.M.T.C Limited Vs. Medchl Chemicals 2002 (I) RCR Criminal 318; Associated Cement Company Vs. Keshwanand 1998 (I) RCR Criminal 309). The complaint is presented through AR Shri Surender who has also been examined as a witness during evidence. Therefore the contention of defence holds no ground.
19. In totality of the facts & circumstances of the case, it was the liability of the accused to bring positive evidence, in the wake of denying the liability by bringing evidence showing the return memos having forged by complainant. The liability was more intense particularly in view of defence of accused of having issued the cheque as security. It was the sole burden and duty of the accused to prove the liability, if any, when he was defending a presumption, which was supporting the dishonoured cheque. The accused has failed to discharge the burden. Having considered the entire evidence, it is proved that accused had issued the cheque against liability and against legally enforceable debt and the said cheque was dishonoured due to insufficiency of funds.
20. Having gone through the provisions of Section138 of the Act, it is clear that evidence U/s 138 N.I. Act casts criminal liability punishable with imprisonment or fine or both on a person who issues a cheque towards the discharge of a debt or liability as a whole or in part and the cheque is dishonoured by bank on presentation.
:8:21. It is proved on record that accused despite service of statutory notice of demand failed to make the payment of the cheque in question within 15 days from receipt thereof. The complainant has fulfilled all the ingredients of Section 138 of the N.I. Act. Accordingly, accused is guilty for committing the offence U/S 138 N.I. Act. Let he be heard on the point of sentence on 8.4.2010 at 2.00 PM.
(Announced in Open Court (MS. RAVINDER BEDI) on 1.4.2010 ) JSCC cum ASCJ cum Guardian Judge (South) 1.4.2010 :9: CC No. 780/1/09 08.04.2010 Present: AR Shri Surender alongwith counsel Mr. Pramod Sharma.
Convict in person with counsel.
It is stated by parties that matter has been amicably compromised pursuant to the settlement and accused has handed over a sum of Rs. 1,10,000/- in cash to the AR of complainant who has accepted the same. AR of complainant seeks withdrawal of the complaint.
Separate statement of AR of complainant is recorded. In view of the statement of AR of complainant, the complaint in hand stands disposed of as compromised. Bail bond cancelled and surety stands discharged.
File be consigned to record room.
(Ms. Ravinder Bedi) ASCJ/JSCC/Guardian Judge South/08.04.2010