Delhi District Court
Accused On The Cheque In Question. In ... vs State & Anr, Hon'Ble on 29 November, 2018
IN THE COURT OF METROPOLITAN MAGISTRATE,
KARKARDOOMA COURTS, DELHI.
Presided by: Sh. Sujit Saurabh
CC No. 58694/16
PS: Preet Vihar
M/S Tirupati Structurals Ltd.
Regd. Office At: 81, Functional Industrial State,
Patparganj, Delhi -110092 ....... Complainant
VERSUS
Ms. Sarika Parmar
Prop. M/S. Tirupati Steel Works,
Ahmadabad Road, Near Modi Petrol Pump,
Ghata Billed, District: Dhar, M.P ...... Accused
Complaint under section 138 of the Negotiable
Instruments Act, 1881
Offence complained of : U/s 138 NI Act
Date of commission of offence : On expiration of 15
days from the date of
service of statutory
notice (sent on 06.06.2016)
Plea of Accused : Not guilty
Date of decision of the case : 29.11.2018
Final Order : Conviction
M/s Tirupati Structurals Ltd. v. Sarika Parmar CC No. 58694/16 page no. 1 /10
JUDGMENT
STATEMENT OF FACTS AND REASONS FOR DECISION
1. The accused is facing trial for commission of offence punishable u/s 138 of The Negotiable Instruments Act, 1881 (in short, NI Act).
2. Facts in brief:
The complainant is a limited company. The complaint has been filed through Authorized Representative Sh. Subhash Tomar (in short, 'AR'). As per complaint, the complainant is manufacturer of Rigid PVC Pipes and Fittings, SWR Pipes and Fittings, Casing Pipes, PPR Pipes and Fittings, Plumbing Pipes, Column Pipes, Foam Boards, HDPE Sprinkler Irrigation Systems, HDPE Pipes and Water Storage Tanks, Solid Waste Management Products etc. The accused is proprietor of M/S Tirupati Steel Works. She was having business dealings with the complainant for many years and much prior to year 2015. The accused purchased PVC pipe from the complainant vide tax invoice number 011, 021, 023, 030, 033, 039 dated 28.04.2015, 10.05.2015, 16.05.2015, 28.05.2015, 30.05.2015 and 06.06.2015 respectively. The accused was maintaining a running/credit account with the complainant. As per ledger account maintained by the complainant, sum of Rs.3,92,012/- was outstanding against the accused in March 2016. In discharge of her liability, the accused issued cheque number 011797 dated 03.05.2016 in sum of Rs.3, 92,012/- drawn on Union Bank of India Dhar branch, District: Dhar-454001. The complainant deposited the aforesaid cheque in its account number 003751000011 at ICICI bank, Preet Vihar branch, Delhi-110092. The cheque was dishonored and returned unpaid to the complainant with endorsement "Payment Stopped by Drawer " vide cheque M/s Tirupati Structurals Ltd. v. Sarika Parmar CC No. 58694/16 page no. 2 /10 return memo dated 10.05.2016. The complainant received the cheque return memo on 13.05.2016. After receiving the cheque return memo, the complainant sent legal demand notice dated 06.06.2016 to the accused by registered post advising her to pay the amount of the cheque within 15 days of the receipt of the notice. The accused did not pay the cheque amount even after expiry of statutory period of 15 days from the date of service of notice. Since accused did not make payment to discharge her liability, the complainant filed the instant complaint.
3. Vide order dated 25.07.2016, cognizance of the offence u/s 138 NI of Act was taken by Ld. Predecessor court and the accused was summoned. On 01.09.2016, the accused put up her appearance before the court. At joint request of the parties, the matter was referred for mediation. However, the matter could not be settled in mediation.
4. Vide order dated 16.01.2017, notice u/s 251 of Criminal Procedure Code, 1973 (in short, "Cr. P. C") was served upon accused. The accused did not plead guilty and claimed trial.
An application u/s 145(2) NI Act was moved on behalf of accused seeking permission to cross-examine the complainant witnesses. The application was allowed and the matter was listed for complainant's evidence (in short "C.E.").
5. The complainant examined two witnesses in its favour.
AR of complainant Sh. Subhas Tomar appeared in witness box as CWI. He led his evidence by way of affidavit Ex. CW1/A. He reiterated the facts mentioned in the complaint. In support of averments in the affidavit , he relied upon the following documents:
M/s Tirupati Structurals Ltd. v. Sarika Parmar CC No. 58694/16 page no. 3 /10
i) Board Resolution of the complainant company date 02.09.2015 Ex.
CW1/1,
ii) Tax Invoice No. 011, 021, 023, 030, 033, 039 dated 28.04.2015, 10.05.2015, 16.05.2015, 28.05.2015, 30.05.2015 and 06.06.2015 respectively, Ex.CW1/2 (colly),
iii) Copy of ledger account Ex. CW1/3,
iv) Cheque deposit slip dated 04.05.2016 Ex. CW1/4,
v) Original cheque bearing no. 011797 dated 03.05.2016 Ex. CW1/5,,
vi) Cheque return memo dated 10.05.2016 Ex. CW1/6,
vii) Legal demand notice dated 06.06.2016 Ex. CW1/7 and
viii) Postal receipts Ex. CW1/8.
CW2 Sh. Ajay Gupta also led his evidence by way of affidavit Ex. CW2/A. The witnesses were cross-examined on behalf of accused. Vide order dated 26.03.2018, CE was closed and matter was listed for examination of accused u/s 313 of Cr. PC.
6. On 23.07.2018, the accused was examined u/s 313 r/w s 281 of Cr. PC. The accused admitted that she was proprietor of M/S Tirupati Steel Works and had business relation with the complainant company. She also admitted that the invoices Ex.CW1/2 (colly) were with respect to purchase of the PVC pipes. She stated that she had given blank cheque to the complainant as security check. She admitted receipt of legal notice.
The accused expressed her willingness to lead defence evidence (in short, DE). Accordingly, the matter was listed for DE.
7. The accused did not file list of defence witnesses. Hence, right of the M/s Tirupati Structurals Ltd. v. Sarika Parmar CC No. 58694/16 page no. 4 /10 accused to lead DE was closed vide order dated 15.092018 and the matter was listed for final arguments.
8. I heard arguments on behalf of both the parties.
To prove his case, Ld. Counsel for complainant emphasized that the cheque in question had been issued by the accused in discharge of her legal liability and all the ingredients of offence u/s 138 of NI Act are full filled in the instant case. Ld. Counsel further emphasized that the accused failed to rebut the statutory presumption in favour of the complainant.
On the other hand, Ld. Defence counsel led emphasis on the following facts to seek acquittal of accused:
a) The accused had not issued the cheque for discharge of any liability. She had given blank cheque to the complainant as security cheque.
b) Accused has already paid the entire amount to the complainant.
c) The account statement and invoices do not match.
9. Since accused is facing trial for commission of offence punishable u/s 138 of NI Act, it is necessary to discuss the essential ingredients of the offence.
To attract offence u/s 138 NI Act, following requirements must be fulfilled:-
(i) that cheque is presented to the bank within the period of six months or its validity, whichever is earlier;
(ii) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice M/s Tirupati Structurals Ltd. v. Sarika Parmar CC No. 58694/16 page no. 5 /10 in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(iii) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
10. Adverting to the facts of the case, in notice u/s 251 of Cr.P.C the accused admitted her signature on the cheque in question. She also admitted that she had issued the cheque to the complainant and that the cheque pertained to her account. Factum of dishonor of the cheques is not in dispute. It is also not in dispute that the cheque was not presented within statutory period. Dispatch of legal notice within statutory time limit is also not in dispute. Receipt of legal notice is also not in dispute. Institution of the complaint within limitation is also not in dispute.
Thus, the basic question for determination is:
Whether the accused had issued the cheques in question in discharge of legal liability?
11. The plea of accused that the date and particulars of the cheque in question had not been filled up by her is of no help in view of admitted signature of the accused on the cheque in question. In Ravi Chopra vs State & Anr, Hon'ble High Court of Delhi held:
"Section 20 NI Act talks of "inchoate stamped instruments" and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an M/s Tirupati Structurals Ltd. v. Sarika Parmar CC No. 58694/16 page no. 6 /10 incomplete negotiable instrument" such person thereby gives prima facie authority to the holder thereof "to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp."
xxx xxxx xxxx "A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either im- pliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for pay- ment by the drawee. There is no provision in the NI Act which either defines the difference in the hand- writing or the ink pertaining to the material particu- lars filled up in comparison with the signature thereon as constituting a 'material alteration' for the purposes of Section 87 NI Act. What however is es- sential is that the cheque must have been signed by the drawer."
12. In Sampelly Satyanarayana Rao Versus Indian Renewable Energy Development Agency Limited (decided on19 September, 2016), Hon'ble Supreme Court discussed the issue of security cheque. The question for consideration was: whether the dishonour of a post-dated cheque given for repayment of loan installment which is also described as security in the loan agreement is covered by Section 138 of the Negotiable Instruments Act, 1881? It was held that dishonour of cheque being for discharge of existing liability is covered by Section 138 of the Act.
In Suresh Chandra Goyal vs Amit Singhal (date of decision 14.05.2015), M/s Tirupati Structurals Ltd. v. Sarika Parmar CC No. 58694/16 page no. 7 /10 Hon'ble High Court of Delhi observed:
"59. Thus, when one party gives a security to the other, implicit in the said transaction is the understanding that in case of failure of the principal obligation, the security may be enforced.
61. Thus, in my view, it makes no difference whether, or not, there is an express understanding between the parties that the security may be enforced in the event of failure of the debtor to pay the debt or discharge other liability on the due date. Even if there is no such express agreement, the mere fact that the debtor has given a security in the form of a postdated cheque or a current cheque with the agreement that it is a security for fulfillment of an obligation to be discharged on a future date itself, is sufficient to read into the arrangement, an agreement that in case of failure of the debtor to make payment on the due date, the security cheque may be presented for payment, i.e. for recovery of the due debt. If that were not so, there would be no purpose of obtaining a security cheque from the debtor. A security cheque is issued by the debtor so that the same may be presented for payment. Otherwise, it would not be a security cheque"
In the instant case, the accused did not raise the defence of security cheque at the earliest opportunity. Admittedly, the accused had received legal notice Ex. CW1/7. However, the legal notice was not replied by the accused. In notice u/s 251 of Cr. PC the accused had taken the plea that the complainant had raised bills for higher amount than what was agreed between them and she had no liability against the cheque in question. She did not take the plea of security M/s Tirupati Structurals Ltd. v. Sarika Parmar CC No. 58694/16 page no. 8 /10 cheque. In application u/s 145(2) of NI Act also, the accused did not raise the plea of security cheque. She took the defence of security cheque for the first time during cross-examination of CW-1 Sh. Subhash Tomar. She failed to lead defence evidence.
In view of the aforsaid facts and judgments above cited, the plea of the accused of security cheque is not sustainable.
13. Section 118 of the NI Act inter alia provides that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration.
Section 139 of the NI Act stipulates that unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability. However, the said presumptions are rebuttable in nature.
In Rangappa V. Sri Mohan, (2010) 11 SCC 441, a three judge bench of Apex Court observed that, Section 139 of the NI Act is stated to be an example of a reverse onus clause which is in tune with the legislative intent of improving the credibility of negotiable instruments.' The Hon'ble Supreme Court further observed that the offence under Section 138 of the NI Act is at best a regulatory offence and largely falls in the arena of a civil wrong and therefore the test of proportionality ought to guide the interpretation of the reverse onus clause. An accused may not be expected to discharge an unduly high standard of proof. A reverse onus clause requires the accused to raise a probable defence or creating doubt about the existence of a legally enforceable debt or liability for thwarting the prosecution. The standard of proof for doing so would necessarily be on the basis of "preponderance of probabilities" and not "beyond shadow of any doubt".
M/s Tirupati Structurals Ltd. v. Sarika Parmar CC No. 58694/16 page no. 9 /10 In the instant case, the accused has failed to raise any probable defence. Mere vague and uncorborated plea of the accused is not sufficient to discharge the onus on her part.
14. On the basis of above discussed facts and law it is evident that the accused has failed to rebut the statutory presumptions in favour of the complainant. Accordingly, accused namely Ms. Sarika Parmar is convicted for offence punishable u/s 138 of NI Act.
Copy of the judgment be given to the convict free of cost.
Digitally signed by SUJIT SUJIT SAURABH
SAURABH Date: 2018.11.29
17:13:07 +0530
Announced in the open court (SUJIT SAURABH)
today i.e. 29.11.2018 MM (Municipal, East)
K.K.D Courts, Delhi
M/s Tirupati Structurals Ltd. v. Sarika Parmar CC No. 58694/16 page no. 10 /10