Delhi District Court
Paul Sales Pvt. Ltd. vs Sudershan on 28 May, 2011
Paul Sales Pvt. Ltd. vs Sudershan
IN COURT OF SH. SANDEEP GUPTA, METROPOLITIAN MAGISTRATE,
NORTH, DELHI
CC No. 841/10
Paul Sales Pvt. Ltd.
having its registered office
at : B-7/11, Double storey,
Ramesh Nagar,
New Delhi-110015
through
Sh. Jagtar Singh Bhatia
Accounts Manager
....................Complainant
vs.
1.Sudershan, Proprietor
Aatish Agencies,
Knak Mandi,
Jammu ( J & K ).
2.Aatish Agencies
Kanak Mandi,
Jammu (J & K ).
............................Accused
The offence complained of or proved : u/s 138 NI Act
The plea of the accused : not guilty
Date of institution of complaint : 31.07.1998
Date on which reserved for judgment : 20.04.2011
Date of pronouncement of judgment : 28.05.2011
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Paul Sales Pvt. Ltd. vs Sudershan
JUDGMENT:
1. Vide this order I shall dispose off the present complaint filed u/s 138 Negotiable Instruments Act 1881. Before entering upon the final decision in the present matter, it is necessary to dwell upon the plethora of facts in the present complaint.
2. Brief history of the facts stated in the complaint is that complainant is a Private Limited Company registered under the companies Act and having its registered office at B-7/11, Double storey, Ramesh Nagar, New Delhi-110015. It is further stated that the complainant is engaged in the business of selling of Haridarshan Dhoops, Agarbatties and Hawan Samagri, the copy of the certificate of incorporation issued by the Registrar of Companies, Delhi & Haryana is ExCW1/A. It is further averred that accused is the sole Proprietor of M/s Aatish Agencies and looking after all affairs of his firm and being the Proprietor of M/s Aatish Agencies entered into an Agreement with the complainant company to become a dealer for the municipal limits of Jammu City area for selling the products of the complainant company and accused duly filled and signed the dealership form agreeing to abide Page 2 of 14 Paul Sales Pvt. Ltd. vs Sudershan by the terms and conditions of the distributorship, copy of the dealership form and the terms & conditions are ExCW1/C and ExCW1/D respectively. It is further averred that the accused used to purchase the goods from the complainant company and make part payment on accounts and a sum of Rs.4,23,552/- became payable by the accused to the complainant in 1998. It is further averred that above sum included a sum of Rs.3,91,000/- towards principal sum due and a sum of Rs. 31,644/- as overdue interest and the statement of accounts of the accused are ExCW1/E and ExCW1/F and the letter sent to the accused before the presentation of cheque is ExCW1/G. It is further stated that accused gave the cheque bearing no. 191704 dt.21.04.1998 for Rs.4,23,552/- drawn on Citizen Co-op. Bank Ltd. Jammu to the complainant, in discharge of his debts and liabilities and assured that the cheque shall be duly honoured on presentation, the said cheque is ExCW1/H. It is further stated that the above mentioned cheque was presented for encashment by the complainant on 21.04.1998 through its banker United Commercial Bank (UCO Bank) and the said cheque was returned unpaid by the banker of the accused i.e. Citizen Co-Op. Bank Ltd. Jammu with the remarks "Payment Stopped by Drawer" and the cheque returning memo issued by UCO Bank, Jammu Branch is ExCW1/I, the cheque returning memo issued by banker of accused is ExCW1/J, the Page 3 of 14 Paul Sales Pvt. Ltd. vs Sudershan advise issued by the banker of the complainant informing the complainant regarding the dishonour of the above mentioned cheque is ExCW1/K. It is further stated that a letter dated 08.06.1998 sent by the complainant to the accused is ExCW1/L. It is further stated that the complainant got issued a legal demand notice dt.19.06.1998, which is ExCW1/M and it was sent through regd. post and the postal receipt is ExCW1/N. It is further averred that the demand notice was duly served upon the accused and accused responded by sending a Telegram on 24.06.1998, which is ExCW1/O. On failure of the accused to make the payment within the stipulated period, the present complaint was filed.
3. After hearing the arguments on summoning, sufficient grounds were made out against the accused u/s 138 NI Act and process was issued against him. On his appearance, he was admitted to bail and notice U/s 251 Cr.P.C was framed upon the accused vide order dt.02.04.09 to which the accused pleaded not guilty and claimed the trial.
4. Sh. Arun Kumar, Managing Director of the complainant company examined himself in complainant's evidence and his affidavit is ExCW1/1, where Page 4 of 14 Paul Sales Pvt. Ltd. vs Sudershan he reiterated the same facts. It is pertinent to mention that witness in his affidavit ExCW1/1, has mentioned that letter dated 08.06.1998 was prepared but was not sent to the accused and it was inadvertently mentioned in pre summoning evidence. He was cross examined at length by the opposite counsel.
During the cross examination, he denied the suggestion that he does not have any knowledge of the execution of documents ExCW1/C and ExCW1/D. He denied that the complainant company obtained seven other cheques as security from the accused apart from ExCW1/H. He further denied that the document ExCW1/H was received as a blank cheque. He denied the suggestion that the complainant had altered the date on the return memo from 16.05.1998 to 08.06.1998.
5. Since the case is of summary triable in nature, hence the examination u/s 313 of Cr.P.C was dispensed with and section 281 clause (6) also does not apply in course of a summary trial. It is pertinent to mention that since an application for cross examination of the complainant was filed by the accused as per the judgment of Hon'ble High Court of Delhi in "Rajesh Aggarwal vs State & Anr.", hence there was no need for examination of accused u/s 313 Cr.P.C. Page 5 of 14
Paul Sales Pvt. Ltd. vs Sudershan
6. Afterwards accused examined himself in defence evidence and he stated that at the time of agreement with the complainant in the year 1997, he handed over eight blank cheques to the complainant for security purpose and earlier a cheque bearing no.191703 of Citizen Co-operative Bank was also dishonoured and for which the complainant sent him a notice dt. 15.01.1998, which is ExDW1/1. He further stated that on dishonour of the cheque in question bearing no.191704, complainant served a notice of demand on him dt. 08.06.98 and thereafter, he was served again with the notice through Ld. counsel for the complainant dt. 19.06.1998. The letter dt. 08.06.98 is ExCW1/L. He further stated that return memo dt. 16.05.98 has been deliberately and dishonestly altered and changed to 08.06.98 and the cheque in question is without any consideration. He was cross examined at length by the opposite counsel.
7. During the cross examination, he deposed that he never sent any notice or reply to the complainant stating that the cheques bearing no.191703 and 191704 also were the security cheques. He never made any attempt to demand back the rest of the seven cheques also, which according to him was given as security to the complainant at the time of signing of the distributorship agreement. He also never Page 6 of 14 Paul Sales Pvt. Ltd. vs Sudershan filed any intimation letter regarding the stopping of the payment of the cheque in question.
8. Accused examined one more witness from UCO Bank, Kirti Nagar Branch, New Delhi and the witness deposed that records in their bank is not available regarding the cheque in question as it is more than 10 years old. The letter issued by their Senior Manager is ExDW2/1.
9. I have gone through the evidence adduced by both the parties and final arguments carefully. The accused has argued that the present complaint is barred by limitation because the return memo ExCW1/K of UCO Bank, Najafgarh Road, New Delhi has been altered and date has been changed from 16.05.1998 to 08.06.1998. However, the accused has not been able to disprove this point and further from the observation of the said return memo, the date has been changed with the red ink and the signatures of the authorized person of the bank on the said return memo are also with the red ink. Had it be the material alteration done by the complainant, then there would have been two signatures on the return memo and if the return memo was originally containing the date of 16.05.1998, then the same blue ink would have Page 7 of 14 Paul Sales Pvt. Ltd. vs Sudershan been used by the authorized person to sign the same. He further argued that the present cheque was given as a security cheque and hence no liability of the accused is made out u/s 138 of NI Act. However, neither the distributorship agreement ExCW1/3 nor the dealership form ExCW1/D is containing any description of giving of any cheque as security by the accused. ExCW1/D is only containing a mention of a draft bearing no.796604 for Rs.11,000/- given as security deposit to the complainant company. The accused has nowhere denied the execution of the documents ExCW1/C and ExCW1/D, then I wonder if the accused gave eight blank signed cheques as security, then why would not he insist on incorporating that clause in the dealership agreement? Accused further argued that since in Para 7 of the complaint, complainant himself said that a letter dt.08.06.98 was sent by him asking for the payment from the accused then the second notice dt.19.06.98 is invalid. However, CW1 i.e. Mr. Arun Kumar made it clear in his affidavit that it was wrongly mentioned in the complaint and the letter EXCW1/L dt.08.06.1998 was prepared but it was not sent to the accused. Even if we accept the contention of the accused then he should have placed on record the original copy of the letter dt. 08.06.1998, which he never did. No proof of delivery of the said notice or receiving of the said notice was placed on record by the accused. If the accused received that Page 8 of 14 Paul Sales Pvt. Ltd. vs Sudershan letter dt.08.06.1998, then he could have sent the reply to the complainant there and then. There has been no action whatsoever from the side of the accused if he was aggrieved from the misuse of the cheque in question.
10. Accused further referred to "Kothai Finance vs Chinna Sami"
2004(1) DCR 564, where it was held that complaint filed after second notice is not maintainable. In that case on receipt of the first notice from the complainant, the accused made a request to wait for some time and present the cheque again and on subsequent presentation, when the cheque was dishonoured then again a legal notice was issued by the complainant to the accused but it was held that complaint filed on the basis of second legal notice is not maintainable. However the fact of that case were different from the present one. Here, neither the accused has been able to show that any legal notice dated 08.06.1998 was received by him, nor he has been able to point out that any such letter was ever sent to him. He also referred on the same grounds another case i.e. "Mahesh Kumar vs Adi Nath Exports" 2009 (1) Crimes 61 (Mad.). He also relied upon "Sadanandan vs Madhavan" 1998 RLR 536 (SC), where it was held that cause of action in respect of offence u/s 138 NI Act arises only once and it cannot arise again by giving time to debtor to pay and upon default Page 9 of 14 Paul Sales Pvt. Ltd. vs Sudershan again presentation to bank and dishonour and it was held that cheque can be presented any number of times within the validity period but legal notice can be issued only once and on failure to make the payment within the stipulated time, the cause of action for filing the complaint will arise. On the same grounds, accused further cited the judgment of "M/s SIL Import, USA vs M/s Exim Aides Silk Exporters, Banglore" 79 (1999) DLT 414 (SC).
11. He further referred to "Raj Kumar Khurana vs State of NCT of Delhi" 2009 RLR 216 (SC). However in that case the cheque in question was returned as dishonoured with the remarks "said cheque reported lost by the drawer"
and in that case criminal complaint was also filed by the accused against the complainant. However in the present matter, neither the accused has placed on record any letter of intimation of stop payment to the concerned bank nor any criminal complaint whatsoever was filed by the accused against the complainant. Moreover the accused has failed to show that the cheque in question was given as security to the complainant. It is upto the accused to establish during the trial that cheque was returned for any reason otherwise than insufficiency of funds in their account. ("Swaroop Vegetables Product Industries Ltd. vs Vindhya Soya Ltd." Page 10 of 14
Paul Sales Pvt. Ltd. vs Sudershan 1996 Cr.L.J 1150 (Madhaya Pradesh). Accused can show that the "stop payment"
instructions were not issued because of insufficiency or paucity of funds. ("MMTC Ltd. vs Medchl Chemicals and Pharma (P) Ltd." AIR 2002 SC 182), which in the present case, accused has failed to show.
12. On the other hand, complainant referred to Harman Electronics Pvt. Ltd. and Anr. Vs National Panasonic India Pvt. Ltd." (2009) 1 SCC 720, where it was held that service of legal notice upon the accused is imperative and only on the service of such notice and failure of the accused to pay the demanded amount within a period of 15 days, the commission of the offence is completed.
13. Complainant further cited "V. Raja Kumari vs P. Subbarama Naidu & Anr." 2007 (1) DCR 152, where it was held that giving of notice is a process of which receipt is a accomplishment. He further referred to "M/s Modi Cements Ltd. vs Sri Kuchil Kumar Nandi" (Supreme Court of India), Criminal appeal nos. 244-46 of 1998, where it was again held that it is upon the accused to rebut the presumption during the trial that stop payment was not because of insufficiency of funds in the bank account.
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Paul Sales Pvt. Ltd. vs Sudershan
14. He further cited "M/s Padminin Polymers Ltd. vs Unit Trust of India" 2003 (1) DCR 341 (Delhi High Court), where it was observed that until and unless the intention is clear on the part of person giving the notice that the payment by the drawer of the cheque should be made within 15 days of receipt, any communication between the parties insisting for making the payment can't be termed as notice u/s 138 of NI Act.
15. Complainant also relied upon "M/s Dalmiya Cements (Bharat) Ltd. vs Galaxy Traders and agency Ltd. & Ors." 2001 DCR 198 (Supreme Court of India), where it was again reiterated that receipt of notice by drawer gives the cause of action.
16. The defence of the accused has been based upon the point of limitation mainly. However as already discussed, there has been no evidence lead by the accused which could show that the letter dt.08.06.1998 ExCW1/L was dispatched by the complainant and also the fact that it does not contain the mention of any advocate, hence the argument of the complainant seems plausible that he did not send this letter as it would have been of no use. Also the accused has failed to Page 12 of 14 Paul Sales Pvt. Ltd. vs Sudershan indicate even by preponderance of probabilities that cheque in question was issued as an security cheque. Further, accused has not lead any cogent evidence to even cast any doubt over the genuineness of the return memo ExCW1/K and has failed to substantiate his averment that date on the return memo has been altered from 16.05.1998 to 08.06.1998.
17. Before entering upon the final verdict, I would like to refer to the judgment "Hiten P. Dalal vs. Bratindra Nath Banerjee" AIR 2001 (SC) 3897 it was held that presumption under NI Act is a presumption of law as distinguished from a presumption under a fact which describes provisions by which the Court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with presumptions of innocence because by the later all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. Obligation on the prosecution may be discharged with the help of presumption of law or fact unless the accused adduces evidence showing the reasonable possibility of non-existence of a presumed fact.
18. I would also like to emphasize the law laid down in K.N. Beena Vs. Page 13 of 14 Paul Sales Pvt. Ltd. vs Sudershan Muniyappan, AIR 2001 SC 2895, where it was held that mere denial / averments in reply by the accused are not sufficient to shift the burden of proof onto the complainant. Accused has to prove in trial by leading cogent evidence that there was no debt or liability, which in the present case accused has not done.
19. Hence in my considered opinion, complainant has been successful in establishing the basic facts and circumstances in his favour and accused has miserably failed in producing any evidence whatsoever in support of his contentions.
20. Therefore, accused is found guilty for offence U/s 138 NI Act and he is hereby convicted for the said offence.
Announced in open court (Sandeep Gupta)
today 28.05.11 MM / North /Delhi
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