Delhi District Court
1/11 Indian Overseas Company Pvt. Ltd vs J.K. Audio & Video on 15 November, 2018
IN THE COURT OF RAKESH KUMAR RAMPURI,
METROPOLITAN MAGISTRATE (NI ACT) (EAST), KARKARDOOMA COURTS:
SHAHDARA, DELHI.
JUDGMENT U/S 355 Cr.PC
a) Serial No. of the case : 57501/16
b) Date of the commission of the offence : 11.06.2012
c) Name of the Complainant : M/s Indian Overseas Co. (P) Ltd.
d) Name of Accused persons and
their parentage and residence : 1. M/s J.K. Audio & Video
2. Harish Kuamr Bajaj
3. Prem Bajaj
R/o R7978, Gali No. 4, East
Vinod Nagar, Delhi.
e) Offence complained of : Dishonouring of cheques for the
reason "Exceeds Arrangement".
f) Plea of the Accused and
his examination (if any) : Not guilty because security cheques in
question given by the accused to the
complainant and due payment had
already been made to the the
complainant.
g) Final Order : Held guilty. Convicted.
h) Order reserved on : 29.10.2018
i) Order pronounced on : 15.11.2018
1/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video
Brief reasons for decision:
1. Briefly stated, the relevant facts of the case of the complainant as
reflected in its complaint are that it is a registered company & an authorized
distributor of electronics goods of various companies in Delhi NCR area. It is case
of complainant that it had supplied and delivered electronics goods as desired by
the accused from time to time & in continuation of business transaction, accused
had issued cheques in question bearing No. 056662 dt. 03.05.2012 Ex. CW1/2,
056663 dt. 03.05.2012 Ex. CW1/3 & 056665 dt. 04.05.2012 Ex. CW1/5 for sum of
Rs. 25000/ each & 056664 dt. 04.05.2012 Ex. CW1/4 for sum of Rs. 19,500/ all
drawn on The Kangra Cooperative Bank Ltd., Acharya Niketan, Mayur Vihar,
PhaseI, Delhi110091, in favour of the complainant. It is further case of
complainant that aforesaid cheques in question returned unpaid by the bank of
accused vide cheque return memos Ex.CW1/6, Ex.CW1/7, Ex. CW1/8 & Ex.
CW1/9 all dt. 05.05.2012 with common remark of 'Exceeds Arrangement'.
Thereafter, the complainant had sent a legal demand notice dt. 24.05.2012 Ex.
CW1/10 through his counsel and accused failed to pay the demanded cheque
amount within stipulated time after receiving said demand notice. Thereafter,
complainant has filed the present written complaint case u/s 138 r/w 142 of the
Negotiable Instruments Act, 1881 (in short NI Act) on 06.07.2012.
2. Notice of accusation u/s 251 Cr.PC was served upon the accused on
20.09.2013 and pleas of defence of accused persons were also recorded on same
day. Thereafter, Authorised Representative (AR) of complainant company Sh.
Subhash Chand Sharma was examined and cross examined on behalf of
complainant company. Statement of accused persons u/s 313 Cr.P.C. also
2/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video
recorded. Accused persons did not lead any defence evidence for proving their
defence pleas. Finally, Ld. Counsel for complainant and accused themselves had
made respective final oral submissions.
3. In T. Vasanthakumar vs. Vijayakumari (Crl. Appeal No. 728 of 2015),
the Hon'ble Apex Court of the land, while dealing with presumptions u/s 139 of NI
Act, observed as under:
"There has been some controversy before us with respect to
Section 139 of Negotiable Instruments Act as to whether
complainant has to prove existence of a legally enforceable debt
before the presumption under Section 139 of the Negotiable
Instruments Act starts operating and burden shifts to the
accused. Section 139 reads as follows:
"139. Presumption in favour of the 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."
9. This Court has held in its three judge bench judgment in
Rangappa v. Sri Mohan (2010) 11 SCC 441:
"The presumption mandated by Section 139
includes a presumption that there exists a
legally enforceable debt or liability. This is of
course in the nature of a rebuttable
presumption and it is open to the accused to
raise a defence wherein the existence of a
legally enforceable debt or liability can be
contested. However, there can be no doubt
that there is an initial presumption which
favours the respondent complainant."
10. Therefore, in the present case since the cheque as well as the 3/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video signature has been accepted by the accused respondent, the presumption under Section 139 would operate. Thus, the burden was on the accused to disprove the cheque or the existence of any legally recoverable debt or liability.
4. Keeping in view of above mentioned settled legal proposition and peculiarity of hypertechnical offence u/s 138 of NI Act and legislative intent behind the same to curb the menace of dishonouring of cheques by unscrupulous drawer for smooth functioning of business activities, the court has to appreciate the material on the record. In instant case the accused no. 2 & 3 admitted that they had signed cheques in question and they were partner of accused firm namely J.K. Audio & Video & long previous business transaction with complainant company. In these circumstance, presumption u/s 139 of NI Act would operate against the accused, who has to rebut the same by leading cogent and reliable evidence or by exposing material contradiction in the case of complainant amounting to reasonable doubt by way of crossexamination of complainant & his witness.
5. Accused persons pleaded that they had not filled the contents of the body of cheque in question. Even blank cheque could be legitimately filled by the holder of the same and same can be presented for encashment. Hon'ble Delhi High Court in a case titled as Ravi Chopra vs State And Anr. dt. 13 March, 2008 observed as under: "18. 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 4/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video blank or have written thereon an 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." Section 49 permits the holder of a negotiable instrument endorsed in blank to fill up the said instrument "by writing upon the endorsement, a direction to pay any other person as endorsee and to complete the endorsement into a blank cheque, it makes it clear that by doing that the holder does not thereby incurred the responsibility of an endorser." Likewise Section 86 states that where the holder acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in the bill, or which substitutes a different place or time for payment, or which, where the drawees are not partners, is not signed by all the drawees, all previous parties whose consent has not been obtained to such acceptance would stand discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance. Section 125 NI Act permits the holder of an uncrossed cheque to cross it and that would not render the cheque invalid for the purposes of presentation for payment. These provisions indicate that under the scheme of the NI Act an incomplete cheque which is subsequently filled up as to the name, date and amount is not rendered void only 5/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video because it was so done after the cheque was signed and delivered to the holder in due course".
6. Accused Prem Bajaj, who also represented accused firm further pleaded that he had given cheques in question to the complainant for the purpose of security for supply of electronics goods, which he used to receive from the complainant. However, even security cheque becomes enforcible once liability becomes due and quantifiable at the time of dishonoring of cheque even if it was not so at the time of handing over post dated or blank cheque to the complainant. Hon'ble Delhi High Court in Suresh Chandra Vs. Amit Singhal Crl. L.P. No. 706/2014 dt. 14.05.2015 observed as under:
" 43. The Court also held that the expression, 'consideration' used in the Contract Act is a very wide term, and it is not restricted to monetary benefit. Consideration does not necessarily mean money in return of money, or money in lieu of goods, or services. Any benefit or detriment of some value can be a consideration. The Court held that the complainant and the other owners of the property blocked their asset till the period of completion of the construction as per the collaboration agreement. The same was the consideration within the meaning of Section 2(d) of the Indian Contract Act. Thus, the reciprocal obligations of the builder, namely to create a security deposit was also a consideration for the contract. Consequently, the court dismissed the quashing petition.
6/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video
44. In Sai Auto Agencies through its partner Dnyandeo Ramdas Rane v. Sheikh Yusuf Sheikh Umar, 2011 (1) Crimes 180, the defence of the respondent/accused was that, in relation to purchase of a tractor and equipments from the appellant, five blank cheques were given only as security. The respondent claimed that the complainant had already received the entire purchase consideration, and that the cheque in question was without consideration. The Court rejected the defence of the accused that the entire consideration stood paid to the appellant supplier. Relying upon Beena Shabeer (supra), the High Court observed:
"7. ... ... ... Necessarily, the cheque given as a security, if bounced, shall be the subjectmatter of a prosecution under Section 138 of the Act. So, the contention of the accused that cheque (exhibit 28) was given only as a security will not enable him to escape from the clutches of law".
(emphasis supplied)
45. The High Court further held as follows:
"9. Even if blank cheque has been given towards liability or even as security, when the liability is assessed and quantified, if the cheque is filled up and presented to the bank, the person who had drawn the cheque cannot avoid the criminal liability arising out of Section 138 of the Negotiable Instruments Act".
7/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video Thus, the myth that the dishonour of a cheque given as a security, cannot be the subject matter of a compliant under Section 138 NI Act was busted in this decision as well".
7. Accused persons also pleaded that they did not received legal demand notice issued by the complainant. Here accused did not deny the correctness of their address appearing on legal demand notice Ex. CW1/10, postal receipt Ex. CW1/11 to Ex. CW1/16 and Courier receipt Ex. CW1/17 to Ex. CW1/22. Moreover, reference may be made to the judgment of Hon'ble Supreme Court of India passed in C. C. Alavi Haji Vs. P. Muhammed (2007) 6 SCC 555 and relevant para of the same is reproduced as under:
17. "It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint u/s 138 of NI Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons, therefore, complaint is liable to be rejected. Any person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously 8/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G. C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskarans case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium of avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."
X X
18. "In the instant case, the averment made in the complaint in this regard is: Though the complainant issued lawyers notice intimating the dishonour of cheque and demanded payment on 04.08.2001, the same was returned on 10.08.2001 saying that the accused was out of station. True, there was no averment to the effect that the notice was sent at the correct address of the drawer of the cheque by registered post acknowledgement due. But the returned envelope was annexed to the complaint and it thus, formed a part of the complaint which showed that the notice was sent by registered post acknowledgement due to the correct address and was returned with an endorsement that the 9/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video addressee was abroad. We are of the view that on facts in hand the requirements of Section 138 of the Act had been sufficiently complied with and the decision of the High Court does not call for interference".
In view of aforesaid observation of Hon'ble Supreme Court of India, the non service of legal demand notice is also of no great legal importance for accused.
8. AR of complainant filed 20 bills/invoices Ex. CW2/32 regarding supply of goods to the accused and statement of account of accused firm Ex. CW1/33 maintained by the complainant company in their books of account. Accused could not extract any material contradiction or infirmities in the case of complainant during crossexamination of it's AR. Accused Prem Bajaj admitted in his statement u/s 313 Cr. P.C. that they had purchased goods of Rs. 15 to 20 lacs from the complainant and also claimed that they had repaid aforesaid amount to the complainant through cheque as well as in cash. No suggestion was given during crossexamination of AR of complainant as to accused Harish was not dealing in the affairs of accused firm as claimed in his self serving statement u/s 313 Cr.P.C. Further, accused persons did not prefer to lead defence evidence for proving their respective claims & defence pleas despite opportunity afforded by the court to them and they did the same at their own peril.
9. In view of admitted purchase of electronics goods from the complainant by the accused and issuance of cheque in question in favour of complainant, both accused persons were admittedly partners of accused firm at relevant time, mandatory presumption of supportive consideration qua dishonoured cheque in question u/s 118/139 of NI Act and also aforesaid 10/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video discussions of facts and law and also absence of any positive defence evidence, this court is of considered view that accused persons failed to rebut the legal presumption of legally enforceable debt or liability arose in favour of holder of cheque i.e. complainant of the case u/s 118/139 of NI Act. Accordingly, accused persons are convicted for the offence u/s 138 r/w 141 of the NI Act in the present complaint case. Digitally signed by RAKESH RAKESH KUMAR RAMPURI KUMAR Location: Karkardooma Courts, East District, Delhi RAMPURI Date: 2018.11.15 16:08:36 +0100 Announced in the open court (RAKESH KUMAR RAMPURI) th on 15 November, 2018 MM/KKD/Delhi This judgment contains 11 signed pages.
11/11 Indian Overseas Company Pvt. Ltd Vs J.K. Audio & Video