Delhi District Court
Rangappa vs Sri Mohan (2010) 11 Scc 441 And Also In ... on 1 May, 2023
IN THE COURT OF MS. PADMA LANDOL,
METROPOLITAN MAGISTRATE, NI ACT DIGITAL COURT- 03, NEW
DELHI DISTRICT, PATIALA HOUSE COURT, NEW DELHI
M/S. ESME CONSUMER PRIVATE LIMITED v. M/S. ASCENT ENTERPRISES
1. Complaint Case no. : 2359/2021
2. Date of Institution of case : 07.04.2021 (As per Layers
Software)
3. Name of the complainant : M/s. Esme Consumer Private Limited
B-104/5, Phase 1, Naraina Industrial
Area, New Delhi-110028
4. Name and address of Accused : M/s. Ascent Enterprises
Through Sole Proprietor
Mr. Gaurav Kapoor, 5th Floor, Flat No.
17, Arunachalam Apartment, 5-Kabir
Marg Clay Square, Lucknow,
Uttar Pradesh-226001
5. Offence complained of : Section 138 NI Act
6. Plea of accused : Pleaded not guilty
7. Final Order : Convicted
8. Date of judgment : 01.05.2023
-:JUDGMENT :-
1. This judgment shall decide and dispose off Criminal Complaint Case
No.2359/2021; titled as M/s. Esme Consumer Private Limited v. M/s. Ascent
Enterprises; instituted under Section 138 of the Negotiable Instruments Act, 1881
(hereinafter NI Act) for the dishonour of one cheque for a sum of Rs.10,00,000/-
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Digitally signed
PADMA by PADMA
LANDOL
LANDOL Date: 2023.05.01
16:58:10 -08'00'
(Rupees Ten Lakhs Only). Erstwhile the complainant was known as M/s. Nature's
Essence Private Limited and the name changed to M/s. Esme Consumer Private
Limited on 03.11.2020, certificate of Incorporation pursuant to name change issued
by RoC in this regard is attached as Ex. CW-1/A (colly). The present complaint has
been instituted and prosecuted by one Mr. Hitesh on the strength of Board Resolution
dated 25.06.2019 [Ex. CW-1/C] and Power of Attorney dated 17.03.2021 [Ex. CW-
1/B].
2. Complainant is stated to be a registered company engaged, inter alia in the
business of manufacture and/or marketing and/or sale and/or distribution of cosmetics
and personal care, wellness products and services. The accused is the sole proprietor
of M/s. Ascent Enterprises who was a distributor/dealer of the complainant carrying
on trade/business of selling the complainant's cosmetic products and executed a
distributorship agreement dated 01.03.2019 [Mark A]. The distributorship agreement
is an undisputed document. It is the case of the complainant that during the course of
business it sold/supplied cosmetic products worth Rs. 21,78,840/- to the accused
between the period 28.05.2019 to 29.06.2019 in accordance with the
order/requirement of the accused. The products were duly received and appropriated
by accused without demur. In pursuant to this, complainant raised invoices [Ex. CW-
1/E (colly)] from time and time and maintained an open and running account in the
name of accused firm. These invoices are duly admitted by the accused. As per the
books of account, the outstanding dues against the accused as of 10.12.2019 is stated
to be Rs. 21,78,840/- calculated in the following manner:
S. No. Particulars Amount (INR)
1. Products supplied under Invoice no. NE/P8/19- 4,16,021/-
20/447 dated 28.05.2019
2. Products supplied under Invoice no. NE/P8/19- 10,31,921/-
20/787 dated 26.06.2019
3. Products supplied under Invoice no. NE/P8/19- 2,78,577/-
20/838 dated 28.06.2019
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PADMA Digitally signed by
PADMA LANDOL
LANDOL 16:58:48 -08'00'
Date: 2023.05.01
4. Products supplied under Invoice no. NE/P8/19- 4,52,321/-
20/447 dated 29.06.2019
Total Outstanding amount 21,78,840/-
Against the said outstanding liability, accused issued the cheque in dispute bearing
no. 192394 dated 10.12.2019 for Rs. 10,00,000/- drawn on IDBI Bank, 12,
Jahangirabad Palace, Rani Laxmi Bai Marg, Hazratganj Lucknow, Uttar Pradesh [Ex.
CW-1/G] with assurance that same shall be honoured upon presentation.
3. Upon presentation, the cheque in dispute came to be dishonoured with remark
"Funds Insufficient" vide a return memorandum dated 04.03.2020 [Ex. CW-1/H].
The complainant eventually sent a legal demand notice dated 21.03.2020 [Ex. CW-
1/I] to the accused through postal receipts [Ex. CW-1/J]. Despite service of the
notice, no payment was received by the complainant. The accused having failed to
make the payment within the statutory period of 15 days, the present complaint has
been filed by the complainant against the accused.
4. The complainant was directed to submit the original case documents (complaint,
affidavit of pre-summoning evidence, cheque and annexed documents) with the
Court, a condition precedent to the taking of cognizance of the complaint, as per
SOP/Guidelines issued by the SCMSC Hon'ble High Court of Delhi for functioning
of Digital Courts. Pursuant to the said compliance, vide order dated 11.08.2021, after
being satisfied that prima facie ingredients of Section 138 NI Act are made out
cognizance was taken and summons were directed to be issued against the accused.
Accused entered into appearance on 21.10.2021 and was admitted to bail on the same
date. Upon seeing that there is a possibility of settlement, matter was referred to
mediation, however, no settlement could be arrived. Thereafter, notice under Section
251 Cr.PC was framed and served upon the accused to which he pleaded not guilty
and claimed trial.
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PADMA by PADMA
LANDOL
LANDOL Date: 2023.05.01
16:59:00 -08'00'
5. The accused then expressed their willingness to move an application under Sec.
145(2) NI Act. Upon the submission of the Ld. Counsel for complainant that he has
no objection to the said application and also considering the facts of the case and
defence taken by accused, the oral application stood allowed. The matter was then
listed for recording of evidence through video conference through Cisco Webex Meet
in compliance of the Project Implementation Guidelines 2020 laid down by Hon'ble
High Court of Delhi and Video Conferencing Rules 2021 issued by Hon'ble High
Court of Delhi dated 26.10.2021. AR for complainant was examined and cross-
examined as CW-1. He tendered his affidavit in post summoning evidence (as the
solitary witness) and relied upon following documents:
i) True copy of certificate of incorporation pursuant to change of name of
complainant company is Ex. CW-1/A (Colly)
ii) Copy of Power of Attorney dated 17.03.2021 is Ex. CW-1/B
iii) Copy of Board Resolution and Power of Attorney dated 25.06.2019 is Ex.
CW-1/C.
iv) Copy of Distributor Dealer agreement is Mark-A.
v) True copy of invoices is Ex. CW-1/E (Colly).
vi) Certificate u/s 65 B of Indian Evidence Act is Ex. CW-1/F
vii) Original cheque in dispute dated 10.12.2019 is Ex. CW-1/G.
viii) Bank Return memo dated 04.03.2020 is Ex. CW-1/H.
ix) Legal Demand Notice dated 21.032020 is Ex. CW-1/I.
x) Postal receipts is Ex. CW-1/J.
xi) Copy of Proof of Delivery is Mark B (colly).
xi) Copy of e-mail dated 09.12.2019 is Mark C.
xii) DIR-12 of M/s. Nature's Essence Private Ltd. is Mark D.
6. After the conclusion of complainant evidence, accused was examined under
Section 313 Cr.PC wherein all the incriminating evidence were put to him. Accused
then moved an application u/s. 315 CrPC which was allowed. In the meantime,
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PADMA by PADMA
LANDOL
LANDOL Date: 2023.05.01
16:59:14 -08'00'
complainant moved an application for grant of interim compensation u/s. 143A NI
Act. Reply was also filed, arguments were heard and vide an order dated 07.01.2023,
the said application was allowed and accused was directed to pay 20% of the cheque
amount i.e. Rs.2,00,000/- to the complainant within 60 days from the date of order.
Thereafter, accused was examined and cross-examined as DW-1. DW-1 has relied on
the following documents:
i) Copy of e-mail dated 13.11.2019: Ex. DW-1/1.
ii) Certificate u/s. 65B of Indian Evidence Act: Ex. DW-1/2.
iii) Letter of Authorization dated 10.08.2020: Ex. CW-1/D1.
iv) Copy of e-mail dated 03.12.2020: Mark X.
v) Copy of e-mail dated 31.12.2019: Mark Y.
vi) Copy of bank statement (01.12.2019 to 31.12.2019): Mark Z (colly).
Thereafter, one Sh. Arjun Kumar was examined and cross-examined as DW-2.
Accused then closed his defence evidence.
7. Final arguments have been heard at length. Complete record including the
written submissions filed by both sides have been perused carefully.
8. The Court shall now deal with the defence taken by the accused and
contentions of both the parties.
DEFENCE OF ACCUSED:
9. The accused denied the liability to the extent of cheque amount in dispute. In
the notice u/s. 251 Cr.PC, accused admitted his signature on the cheque in dispute.
All other particulars on the cheque in dispute except the name of payee were also
admitted by accused to be in his handwriting. Accused further admitted his address
mentioned on the legal demand notice to be correct, however, denied receiving the
same. He submitted that Mr. Harish from Accounts department of Nature's Essence
Pvt. Ltd. telephonically informed him about the dishonour of cheque in dispute and
demanded the cheque amount. In his defence, he stated that he had issued the cheque
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PADMA by PADMA
LANDOL
LANDOL 16:59:24
Date: 2023.05.01
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in dispute by way of security and he has to pay Rs.2,50,000/- only to the complainant.
In his statement u/s. 313 Cr.PC, accused admitted receiving of goods and invoices,
however submitted that he returned goods worth approximately Rs. 28 Lakhs. That
after 3 months, the complainant audited the goods and sent an e-mail admitting
receiving of goods worth Rs.18 Lakhs only, hence the dispute qua Rs.10 Lakhs arose.
That he had packed and returned the goods in the presence of the officials of
complainant. He has also stated that the complainant was responsible for collection of
money from market and he has still not received outstanding payment from market.
After the presentation of the cheque in dispute, under the pressure of Mr. Awdesh
Awasthi, Area Manager of complainant, he had made a payment of Rs. 5 Lakhs to the
complainant in two parts on 31.12.2019.
10. In the final arguments, complainant has asserted its case for conviction against
the accused essentially on the ground of having proved the cause of action against
him, beyond all reasonable doubt. This is premised on the substantive proof of
presentation of the cheque in dispute admittedly issued by the accused with his
signature, its return as dishonoured from the payee's bank upon presentation for
encashment and non-payment by the accused of the legally enforceable debts within
the statutorily prescribed period, despite service of legal demand notice. It is
submitted by the Ld. Counsel for the complainant:
i) That accused had issued the cheque in dispute towards discharge of part payment of
the outstanding liability. Accused failed to reply to the legal demand notice as he had
no answer to the same since the liability is already admitted. Further, the signature on
the cheque in dispute is also admitted, hence, the presumption u/s. 139 NI Act is in
his favour.
ii) That the accused has failed to produce any substantial document to rebut the
presumption raised against him, mere denial of liability is not sufficient to rebut the
presumption, hence, there is no question of reverse onus on the complainant.
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PADMA by PADMA
LANDOL
LANDOL 16:59:36
Date: 2023.05.01
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iii) That the accused has failed to produce any documentary proof to establish the
payment of Rs. 5 Lakhs to the complainant.
iv) That the accused had admittedly sent an e-mail dated 09.12.2019 vide which he
had instructed the complainant to present the cheque in dispute.
v) That merely labelling the cheque in dispute as a security cheque does not negate its
purpose as an instrument intended to settle a legally enforceable debt or liability.
vi) The e-mail dated 13.12.2019 relied on by accused merely communicates a list of
goods and lacks any confirmation or acknowledgment of receipt of returned goods by
the complainant.
Ld. Counsel has placed reliance on the following judgments in support of his
arguments:
a) Kalamani Tex and Ors. v. P. Balasubramanian (2021) 5 SCC 283
b) Triyambak S. Hegde v. Sripad (2022) 1 SCC 742
c) Sunil Todi and Ors.v. State of Gujarat and Ors. AIR 2022 SC 147
d) Kishan Rao v. Shankargouda (2018) 8 SCC 165
11. Per contra, Ld. Counsel for the accused has prayed for dismissal of the
complaint and acquittal of the accused persons on several counts:
i) That the cheque in dispute was a security cheque and there is no enforceable
liability to the tune of cheque amount in dispute, however, complainant has concealed
this fact in its complaint.
ii) That the accused has filed the receipt of payment of Rs. 5 Lakhs through NEFT of
Rs. 3,65,000/- and IMPS of Rs. 1,35,000/- both on 31.12.2019. That the complainant
failed to make any endorsement on the cheque in dispute prior to its presentation.
iii) That the complainant has concealed material facts including receipt of Rs. 5
Lakhs from accused and return of stocks by accused which is admitted by
complainant's official vide e-mail dated 13.11.2019.
Ld. Counsel has placed reliance on the following judgments in support of his
arguments:
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PADMA by PADMA
LANDOL
LANDOL 16:59:48
Date: 2023.05.01
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a) Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel & Ors. (2023) 1
SCC 578
b) Bijender @ Mandar v. State of Haryana 2022 AIR (SC) 466.
c) P. Vijayan v. State of Kerala 2010 AIR (SC) 663.
d) Ramjas Foundation & Ors. v. Union of India & Ors 2010 (14) SCC 38.
e) Jai Prakash Tiwari v. State of Madhya Pradesh 2022 SCC OnLine SC 966.
f) Narinder Singh Arora v. State (Govt. of NCT of Delhi) & Ors 2012 (1) SCC 561.
12. It is now pertinent to examine the factual matrix of the case in the light of the
ingredients of the provision as produced herein:
138. Dishonour of cheque for insufficiency, etc., of funds in the account.--
Where any cheque drawn by a person on an account maintained by him
with a banker for payment of any amount of money to another person
from out of that account for the discharge, in whole or in part, of any
debt or other liability, is returned by the bank unpaid, either because of
the amount of money standing to the credit of that 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 that
bank, such person shall be deemed to have committed an offence and
shall, without prejudice to any other provision of this Act, be punished
with imprisonment for a term which may be extended to two years, or
with fine which may extend to twice the amount of the cheque, or with
both: Provided that nothing contained in this section shall apply unless
--
(a) the 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;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.8 of 20 Digitally signed PADMA byLANDOL PADMA LANDOL Date: 2023.05.01 17:00:00 -08'00' giving a notice; in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.--For the purposes of this section, "debt of other liability" means a legally enforceable debt or other liability.
13. The essential ingredients in order to attract Sec. 138 of NI Act, 1881 are:
i) Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;
(ii) Dishonor of cheque in dispute which must have been drawn on an account maintained by the accused;
(iii) Service of legal demand notice seeking payment of cheque amount within 30 days from the date of receipt of return memo;
(iv) Non-payment of cheque amount within fifteen days from the date of service of notice; and
(v) Filing of complaint within one month from the date on which cause of action arises.
14. Now, coming to the facts of the case in hand in the light of above mentioned legal principles. In the instant case, the issuance of the cheque in dispute [Ex. CW- 1/G] by the accused, its presentation in the bank for encashment and subsequent dishonour due to the reason "funds insufficient", is not disputed and is a matter of record, as proved by the return memo [Ex. CW-1/H]. It is also established that the cheque in dispute belongs to the accused and even the signature on the same is admittedly of the accused. Once these facts are established, a presumption of the cheque having been issued in discharge of a legally existing liability and drawn for good consideration arises by virtue of Section 118 (a) of the Negotiable Instruments CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.9 of 20 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.01 17:00:11 -08'00' Act. Once Section 139 of the NI Act comes into picture, the Court presumes that the cheque was issued in discharge, in whole or in part, of any debt or liability. At this stage, with the help of presumption under Section 139 of the Negotiable Instruments Act, the case of the complainant stands proved.
15. Since the presumption under Section 139 read with Section 118(a) of the NI Act is in favour of the complainant, it is now for the accused to rebut the same either by discrediting the veracity of material relied upon by the complainant or by leading positive evidence to probabilise his defence on the touchstone of preponderance of probabilities as provided by the three Judge bench of the Hon'ble Supreme Court in Rangappa Vs Sri Mohan (2010) 11 SCC 441 and also in Rohitbhai Jivanlal Patel v. State of Gujarat & Anr. (2019) 18 SCC 106.
16. It is trite law that for rebuttal of the said presumption under Section 139 read with Section 118(a) of NI Act, accused need not even step into the witness box as he can rebut the same by placing reliance on the material brought on record by the complainant or even by raising presumptions of fact and law on the basis of material available on record. The accused has to make out a fairly plausible defence which is acceptable to the Court. Therefore, the standard of proof required from the accused to prove his defence is "preponderance of probabilities" and not beyond reasonable doubts. However, at the same time, it is also to be remembered that bare denial of the existence of legally enforceable debt or other liability cannot be said to be sufficient to rebut the presumption and something which is probable has to be brought on record to shift the burden back to the complainant.
The statutory presumption u/s. 118(a) NI Act reads as under:
118 Presumptions as to negotiable instruments. --Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration --that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.10 of 20 Digitally signed PADMA by PADMA LANDOL LANDOL 17:00:22 Date: 2023.05.01
-08'00' been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration The statutory presumption u/s. 139 NI Act reads as under:
39. Presumption in favour of holder. --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.
17. Keeping these basic principles in mind, this Court shall now proceed to deal with the various defences taken by the accused and examine whether the accused has been able to rebut the presumption arising in favour of the complainant:
I. Return of goods worth Rs. 28 Lakhs:
i) The first and foremost defence taken by the accused is that he had returned goods worth Rs. 28 Lakhs to the accused. One Mr. Amit Kumar Gupta, Regional Manager of the complainant company had acknowledged the same through an e-mail ID dated 13.11.2019 [Ex. DW-1/1]. That after 3 months, the complainant said that the returned goods were worth Rs. 18 Lakhs only. In support of this defence, accused has produced a copy of e-mail dated 13.11.2019 [Ex. DW-1/1] and a copy of e-mail dated 03.12.2020 [Mark X]. The copy of e-mail dated 13.11.2019 [Ex. DW-1/1] was put to the AR for complainant during his cross-examination and the AR denied the correctness of the same stating that the e-mail does not contain any acknowledgment of receipt of goods and is merely a list of goods. Ld. Counsel for complainant has also argued that the e-mail dated 13.11.2019 contains only a list of alleged return of stocks and lacks any confirmation or acknowledgment of receipt of the returned goods by complainant, hence the said defence is nothing but a concoction of falsehood.
ii) During the cross-examination of accused, a specific question was put to him if the e-mail dated 13.11.2019 [Ex. DW-1/1] bears any acknowledgment of receipt of goods CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.11 of 20 Digitally signed PADMA by PADMA LANDOL LANDOL 17:00:34 Date: 2023.05.01
-08'00' by the complainant. To this, accused (DW-1) fairly answered that there was no communication from the complainant regarding receiving of goods because they do not maintain such kind of practice. That the name of courier company through which goods were sent is mentioned in the e-mail. He further stated that there was a verbal agreement between himself and the complainant for returning of goods worth Rs. 28 Lakhs. No written agreement was executed in this regard. He further conceded that he returned the goods in October and November 2019 i.e. prior to 09.12.2019 on which date he had sent an e-mail to the complainant to present the cheque in dispute for encashment.
iii) Perusal of e-mail dated 13.11.2019 [Ex. DW-1/1] reflects that it was sent by Amit Kumar Gupta ([email protected]) to [email protected] and same is copied to various other persons including the accused. The text of the e- mail reads as, "Dear Sir Please find below the detail of Ascent Enterprises, Lucknow Stock Return." Then it contains a table having a list of bill no, bill date, bill amount and remarks. Close perusal of the e-mail nowhere shows the acknowledgment/receipt of returned goods from the accused to complainant. As correctly stated by the Ld. Counsel for complainant, the e-mail bears only a list of stock and nothing more. It also nowhere mentions the value of return stock which was allegedly worth Rs. 28 Lakhs as per the accused. Further, as already seen, this e-mail is merely a list of stocks and it nowhere mentions if the stocks were already returned or yet to be returned by the accused. In such a scenario, this e-mail per se is not sufficient to establish a defence that certain goods were returned by the accused to complainant. Moreover, accused has already admitted in his cross-examination that there was no communication from the complainant regarding receiving of goods and further, there was only a verbal agreement between the parties for return of goods worth Rs. 28 Lakhs.
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iv) In a further attempt to establish the return of goods, accused called Arjun Kumar, DW-2 who was stated to be an employee of the accused at the relevant time. DW-2 had deposed that one Surya Kumar Dubey, an official of the complainant company had visited the office of accused in October-November 2019 to collect return stocks, however he did not give any receiving of the returned stocks. He further deposed that the Manager of the complainant company sent a scanned bilty through e-mail. However, no such bilty was produced by the witness. DW-2 also failed to give any details of return stocks as to its quantity and value. When a specific question as to the acknowledgment of receipt of goods in the e-mail dated 13.11.2019 was put to the accused and so a similar question regarding bilty to DW-2, it was incumbent upon the accused to lead further evidence or call a material witness to prove the return of goods, however, accused failed to take steps in that regard. Hence, a mere oral deposition of DW-2 that goods were returned in the presence of complainant's officials and no further material details of stocks as to its quantity and value were given and further, when such a deposition is not corroborated by any documentary proof lacks credence and does not inspire confidence. Further, DW-1 has deposed in his cross-examination that he was not authorised to do collection from the market, rather his job was to receive, hold and distribute the goods. Per contra, DW-2 has deposed in his cross-examination that Manager used to bring orders, then they (accused proprietorship firm) used to transport the goods and payment were received in the current account of accused firm and that the payment used to come against the goods that they sell. Hence, there is a contradictory statement of DW-2 qua receiving of payment. For this reason also, the deposition of DW-2 does not inspire much confidence and cannot be relied upon as narration of true facts.
v) Coming to the copy of e-mail dated 03.12.2020, accused has deposed that complainant through Mr. Rajiv Arora admitted receiving of goods worth Rs. 18 Lakhs. The text of the e-mail is, "Dear Gaurav ji, Following is the summary for today's call with Amarendra. Regards Rajiv". This is followed by the following table-
CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.13 of 20 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.01 17:00:59 -08'00' SNAPSHOT Total Outstanding as per NEPL 20,57,278 Less:
Disputed Return Pending:
Claimed 28,63,050 Goods Received 18,25,461 Net Dispute Amount on short goods received 10,37,589 10,37,589 Receivables from Distributors (Yet to be verified) 7,59,090 Clear Outstanding 2,60,599
This copy of e-mail dated 03.12.2020 [Mark X] was also put to the AR for complainant during his cross-examination who expressed having no knowledge about the same, thereafter denied its correctness stating that it is only a record of phone call conversation.
vi) Perusal of the e-mail dated 03.12.2020 reflects that amount against goods received is mentioned as Rs. 18,25,461/-, however, net dispute amount is mentioned as Rs.
10,37,589/- and further, receivables from distributors (yet to be verified) is also mentioned as Rs. 7,59,090/-, hence, in the presence of certain disputed amounts, it cannot be said with certainty that after receiving of goods worth Rs. 18,25,461/-, the outstanding is Rs. 2,60,599/- only. The entries in the above mentioned table were not explained by the accused in any manner and the air of uncertainty still persists. Accused has also not examined any material witness to draw corroboration to this e- mail. Even otherwise, the copy of e-mail being an electronic document is not supported with mandatory certificate u/s. 65-B Indian Evidence Act, 1872. It is trite law that any electronic record/document when not supported by mandatory certificate u/s. 65-B Indian Evidence Act, 1872 cannot be read in evidence. Reliance in this regard is placed on the judgment in Arjun Panditrao Khotkar v. Kailash Kushanrao CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.14 of 20 Digitally signed PADMA byLANDOL PADMA LANDOL 17:01:11 Date: 2023.05.01
-08'00' Gorantyal [2020 SCC OnLine SC 571]. Hence, the copy of e-mail dated 03.12.2020 [Mark X[ cannot be made admissible in evidence.
In view of the above, the defence of the accused that he returned goods worth Rs. 28 Lakhs being a bald averment, not supported by any cogent evidence is devoid of merits, hence is liable to be dismissed.
II. Defence of payment of Rs. 5,00,000/- and outstanding liability to the extent of Rs. 2,50,000/- only:
i) The next defence taken by the accused is that he had returned the goods worth Rs.
28 Lakhs, thereafter in good faith he still paid Rs. 5 Lakhs to the complainant on 31.12.2019. In this regard, he has filed a copy of e-mail dated 31.12.2019 [Mark Y] and a copy of bank statement (01.12.2019 to 31.12.2019) [Mark Z (colly)]. During his cross-examination, AR for the complainant showed his unawareness about the payment of Rs. 3,65,000 on 31.12.2019 [Mark Z (colly)]. Mark Y is a copy of e-mail showing NEFT Debit Confirmation of transaction of Rs. 3,65,017.7 on 31.12.2019. Mark Z (colly) shows two entries of transfer of Rs. 1,35,000/- and Rs. 3,65,000/- to Natures essence both dated 31.12.2019. The case of the complainant herein is that the cheque in dispute for Rs. 10 Lakhs was issued and presented towards partial discharge of outstanding liability of Rs. 21,78,840/-, however, the accused has failed to show if he had transferred Rs. 5 Lakhs specifically towards the cheque in dispute or towards the total outstanding liability. Not a whisper of averment in this direction has come on record. Accused has simply stated that in good faith, he had still paid Rs. 5 Lakhs. Hence, this defence suffers from vagueness and ambiguity, as such cannot be relied upon. Even if Rs. 5 Lakhs is assumed to have been paid towards the outstanding liability as per the admitted invoices on record, the outstanding balance would still be 16,78,840/- which is over and above the cheque amount in dispute. Even otherwise, both the documents, namely the e-mail and bank statements are undoubtedly electronic documents and the accused has failed to file the mandatory certificate u/s. 65-B of Indian Evidence Act, 1872 with these documents. There is no CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.15 of 20 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.01 17:01:23 -08'00' gainsaying that in the absence of this certificate, these electronic documents cannot be read in evidence.
ii) Qua outstanding liability, accused has stated during framing of notice u/s. 251 Cr.PC that it is only Rs. 2,50,000/-, however, neither evidence of any sort has been led nor any witness has been examined to establish this defence. Hence, the defence that outstanding liability is Rs. 2,50,000/- only is a bald averment which can be in no manner considered to be sufficient to rebut the presumption under 139 r/w 118 of NI Act. In view of the same, this defence is also liable to be dismissed as devoid of merits.
iii) Moreover, during the cross-examination of accused, he has categorically stated that he had returned the goods in October and November 2019 i.e. prior to 09.12.2019 on which date he had sent an e-mail [Mark C] to the complainant asking them to present the cheque in dispute for encashment. When the accused himself is admitting that after the return of goods, he had sent the e-mail to complainant to present the cheque in dispute for Rs. 10,00,000/-, then it goes without saying that he had admitted the liability of Rs. 10,00,000/- even after the alleged return of goods. For this reason also, the defence that outstanding is Rs. 2,50,000/- only fails as devoid of merits.
III. Attempts to pick holes in the case of complainant by raising other objections:
i) Ld. Counsel for accused has contended that complainant failed to confirm the delivery of goods to accused via copy of proof of delivery [Mark B (colly)]. During cross-examination of CW-1, he has conceded that proof of delivery [Mark B (colly)] do not bear any acknowledgment by the accused. However, it is to be noted that in statement u/s. 313 Cr.PC accused has admitted the receiving of goods and also admitted the invoices [Ex. CW-1/E (colly)]. He has in fact stated he received the goods and after sometime, returned goods worth Rs. 28 Lakhs. Accused has also CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.16 of 20 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.01 17:01:35 -08'00' admitted the proof of delivery as well as invoices during his statement u/s. 294 Cr.PC.
Hence, the purpose for which proof of delivery [Mark B (colly)] was filed is fulfilled by the admission of accused. In view of the same, the contention of the Ld. Counsel for accused that proof of delivery does not bear acknowledgment of accused holds no water and is liable to be dismissed.
ii) Ld. Counsel for accused has further contended that since accused had paid Rs. 5 Lakhs, complainant should have made endorsement on the cheque in dispute in terms of Sec. 56 of NI Act before presentation of the cheque. It is trite law that if a drawer of a cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable liability on the date of maturity would not be the same represented on the cheque. In such a case, there shall be an endorsement on the cheque in terms of Section 56 of the NI Act and the cheque may be used to negotiate the balance, if any. In the present case, it is already seen above that accused has failed to prove the part payment towards cheque in dispute. In such a scenario, the defence that complainant failed to endorse the cheque in dispute has no effect and is liable to be rejected.
IV. Defence that cheque in dispute was issued by way of security:
The next defence raised by the accused is that the cheque in dispute was given to the complainant by way of security and the complainant has misused the same. This fact is categorically admitted by CW-1 in his cross-examination on 07.04.2022 as well as on 29.06.2022. CW-1 has stated that the cheque in dispute was already signed and name of complainant was also filled by the accused. The amount was not filled as it was subject to final discussion between the parties. In this regard, Ld. Counsel for complainant has relied on the judgment in Kalamani Tex (supra) to contend that even a blank cheque leaf, voluntarily signed and handed over by the accused towards some payment attracts presumption under Section 139 NI Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.17 of 20 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.01 17:01:48 -08'00' Qua presentation of security cheque for encashment, it has been held by the Hon'ble Supreme Court of India in Sripati Singh v. State of Jharkhand and Anr. 2021 SCC OnLine SC 1002 wherein it has been held that:
"17. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of NI Act would flow."
Further, the Hon'ble High Court of Delhi in Credential Leasing & Credits Ltd. Vs. Shruti Investments 2015 SCC OnLine Del 10061 has held that even a security cheque can form the basis of complaint under Section 138 of the NI Act, if on the date of the deposit of the post-dated security cheque, the debt of the accused stood crystallized.
In the present case, accused has failed to show that there was no outstanding liability against him on the date of presentation of the cheque in dispute or there was any kind of understanding or agreement between the parties whereby payment of outstanding liability was deferred, hence, the complainant was within his rights to present the cheque in dispute and consequently file the present complaint. Moreover, CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.18 of 20 Digitally signed PADMA by PADMA LANDOL LANDOL 17:01:59 Date: 2023.05.01
-08'00' during the cross-examination, accused has fairly admitted the sending of e-mail dated 09.12.2019 [Mark C] whereby he asked the complainant to present the cheque in dispute in the following words, "Dear All, This is in regard to a payment of Rs. 10 lacs that i have issued to you towards my outstanding amount for dated 10/12/2019. Request to kindly present the same on 13/12/2019. Regards Gaurav Kapoor." The only explanation given by accused in this regard is that though he had asked to present the cheque in dispute via the e-mail dated 09.12.2019 however, he did not acknowledge the outstanding liability to the tune of Rs. 10 Lakhs. When the wordings of e-mail dated 09.12.2019 is unambiguous in regards the cheque amount, the plea of accused that the amount was not acknowledged is meritless and appears to be an afterthought attempt to evade from the liability. Consequently, the defence that the cheque in dispute was a security cheque and complainant misused the same is also liable to be dismissed.
18. It is a settled law that though the degree of burden on the accused to rebut the presumption is only to the extent of preponderance of probability, however, in order to cross this threshold accused has to take some steps which is more that mere averments, however, this has not been done in the present case. The Hon'ble Supreme Court in Rohitbhai Jivanlal Patel (supra) and in various other rulings have time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under section 118 and 139 of the NI Act. In the case at hand, keeping all the aspects in view, the defence put forth by the accused and rebuttal of presumption raised against him is only a mere denial when tested on the touchstone of preponderance of probability. Further, it has been held in Rajesh Agarwal v. State 2010 SCC OnLine Del 2511 that:
"9. .....There is no presumption that even if an accused fails to bring out his defence, he is still to be considered innocent. If an accused has a defence against dishonour of the cheque in question, it is he alone who CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.19 of 20 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.01 17:02:12 -08'00' knows the defence and responsibility of spelling out this defence to the court and then proving this defences is on the accused....."
19. In the light of the foregoing discussions, this court is of the firm opinion that the accused has not led any cogent evidence to rebut presumptions under Sec. 118 and 139 of NI Act. There is nothing coming out either in the cross examination of CW-1 or in Defence evidence which would probabilize the defence raised by the accused or falsify the case of the complainant, in fact as already discussed the defence of the accused is highly improbable and is not in the nature of compelling rebuttable evidence. In the above view, the complainant has proved that the accused had issued the cheques in dispute in his favour for discharge of the legally enforceable liability. This Court has no hesitation in holding that in the facts and circumstances of the present case, the complainant has brought home his case proving the complicity of the accused in the offence under Sec. 138 Negotiable Instruments Act. Resultantly, the accused Gaurav Kapoor, Proprietor of M/s. Glymo International is thus, held guilty and stands convicted for the said offence. Announced in Open Court today on 01.05.2023.
PADMA Digitally signed by PADMA LANDOL LANDOL 17:02:26 -08'00' Date: 2023.05.01 (PADMA LANDOL) MM (NI Act) Digital Court-03 New Delhi, PHC/Delhi/01.05.2023 Certified that this judgment contains 20 pages and each page bears my digital signatures.
PADMA Digitally signed by PADMA LANDOL LANDOL Date: 2023.05.01 17:02:38 -08'00' (PADMA LANDOL) MM (NI Act) Digital Court-03 New Delhi, PHC/Delhi/01.05.2023 CC NO. 2359/2021 M/S. ESME Consumer Private Limited V. M/S. Ascent Enterprises Page no.20 of 20