Delhi District Court
Order Dt. 31.08.1999 In Case Titled As ... vs . Union Of India" Writ Petition on 28 October, 2014
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IN THE COURT OF SH. HARUN PRATAP, METROPOLITAN MAGISTRATE -
01 (CENTRAL), TIS HAZARI COURTS, NEW DELHI.
Indian Oil Corporation
....................Complainant
Versus
AAUI Service Station .......................Accused
C.C.NO. 140/1/14
PS - Prasad Nagar
Under Section 138 of N. I. ACT, 1881
a) Sl. No. of the case : 02401R5420332004
b) Alleged date of commission of : Approx 09.02.2000
offence
c) Name of the complainant : M/s Indian Oil Corporation Ltd.
d) Name of the accused, and his : 1.)M/s AAUI Service Station
address Wellington Crescent,
New Delhi.
2.) Sh. Sandeep Malik, Partner
S/o Sh. T.R. Malik
3.) Sh. Mandeep Malik, Partner,
S/o Sh. T.R. Malik
Both R/o 120-A,
Sainik Farms,
New Delhi
e) Offence complained of : Under Section 138 of N. I. Act, 1881
CC No.140/1/14 Page no. 1 of 12
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f) Plea of accused : Pleaded not guilty
g) Final order : Acquitted
h) Date of such order : 28.10.2014
i) Brief statement of the reasons for the decision :
1.Vide this judgment, the Court shall decide the complaint case under Section 138 Negotiable Instruments Act, 1881 (hereinafter referred to as NI Act) filed by the complainant Indian Oil Corporation through its AR against the accused M/s AAUI Service Station and its partners.
2. Briefly stated, the averments of the complaint are that the complainant is a company duly incorporated under the provisions of the Companies Act, 1956 and is carrying on the business of refining and sales of petroleum products. It has been alleged that the complainant company appointed the accused no.1 i.e the partnership firm, as a dealer for sale of its products and accused no.2 and 3 are the partners of accused no.1 who are in-charge and responsible for the conduct of day to day business of the latter. Allegedly, the accused no.1 used to place orders from time to time with the complainant company for supply of its products which were supplied against necessary payment through cheques. The accused no.1 had also been granted credit facilities within the policy guidelines framed under the terms of the dealership agreement. It has been alleged that the accused no.1 placed an order for supply of goods with the CC No.140/1/14 Page no. 2 of 12 3 complainant company vide indents dt. 14.12.1999 and 15.12.1999 against which the complainant supplied the goods vide challan no.9423 dt.14.12.1999, 400566 dt. 15.12.1999 respectively. The accused allegedly made the payment of the abovesaid purchases through cheques bearing no. 287859 dt. 13.01.2000 for Rs.123644, bearing no. 287863 dt. 14.01.2000 for Rs.188035 and cheque no.287860 dt.13.01.2000 for Rs. 131387/-, all drawn on Jammu & Kashmir Bank, Rajinder Place, New Delhi, in favour of the complainant company. However, on being presented for encashment, the abovesaid three cheques were returned dishonored vide return memo dt. 17.01.2000 due to the reason "Exceeds Arrangement". The complainant thereafter got issued a legal demand notice dt. 17.01.2000, through registered AD and UPC upon the accused. Despite the expiry of the stipulated period in this regard, the accused failed to make the payment of the cheque amount in question and hence, the present complaint case was filed on 17.02.2000 for the offence u/s 138 Negotiable Instruments Act.
3. The accused were summoned by Ld. Predecessor, vide order dated 29.07.2000. Accused no.2 was declared P.O. by the Court vide order dt. 22.05.2003 and notice of the accusation for the offence punishable u/s 138 N.I. Act was put to the accused no.1 and 3 vide order dated 26.07.2003, to which they pleaded not guilty and claimed trial.
4. In order to prove the allegations levelled by it against the accused, the complainant examined its AR namely Sh. Ravinder Kumar Bhatia as CW1. He tendered CC No.140/1/14 Page no. 3 of 12 4 his evidence by way of affidavit Ex.CW1/X, wherein he stated the contents of the complaint on oath before the Court and relied upon the documents Ex.CW1/1 to Ex.CW1/20.
5. The CE was thereafter closed vide order dt.13.03.2014. The statement of accused was recorded u/s 313 read with section 281 CrPC, vide order dt. 07.05.2014 wherein the entire incriminating evidence was put to the accused but the latter denied the same and wished to lead DE. The accused thereafter examined Sh. Ajay Bajaj from Land and Development office as DW1, who brought on record the documents Ex.DW1/1 and Ex.DW1/2. Accused no. 3 also examined himself as DW2 and Sh. Rakesh Kakra, the employee of accused no.1 has been examined as DW3. DE was thereafter closed vide order dt.03.09.2014.
6. Final arguments heard. File perused.
7. Following Points arise for determination by this court :
(1) Whether the complainant has proved on record the essential ingredients of offence under Section 138 of Negotiable Instruments Act, 1881 against the accused.
(2) Final order.
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8. Point No. (1) - To decide this point, lets analyze the main ingredients of Provision 138 of Negotiable Instrument Act, 1881 and the evidence on record regarding these ingredients : -
(a) Whether the cheque was drawn/issued by the accused person to the complainant on an account maintained by him with the bank for discharge, in whole or in part, of any debt or other liability?
(b) Whether the cheque was presented to the bank within a period of six months or within the period of its validity?
(c) Whether the cheque so presented for encashment was dishonored?
(d) Whether the payee/complainant of the cheque issued a Legal Demand Notice within 30 days from the receipt of information from the bank regarding dishonourment of the cheque?
(e) Whether drawer of the cheque failed to make the payment within 15 days of receipt of afore-said Legal Demand Notice?
9. It is pertinent to mention here that the complainant has to prove all the abovesaid ingredients simultaneously on record to bring home the conviction of the accused.
10. In this case, the complainant has brought on record the power of attorney executed in favour of its AR's as Ex.CW1/1 and Ex.CW1/2. The complainant has also CC No.140/1/14 Page no. 5 of 12 6 brought on record the partnership deed of the accused as Ex.CW1/3, while the supplementary partnership deed has been brought on record as Ex.CW1/4. The dealership agreement between the complainant and the accused has been brought on record as Ex.CW1/5. The complainant has further brought on record the orders for supply of goods and the delivery challan in respect thereto as Ex.CW1/6 to Ex.CW1/10. The cheques in question bearing 287859 dt.13.01.2000, 287863 dt.14.01.2000 and cheque no.287860 dt.13.01.2000, all drawn on The Jammu & Kashmir Bank Ltd., Rajender Place Branch, issued by the accused in the favour of the complainant have been brought on record as Ex.CW1/11 to Ex.CW1/13. It has been further contended that on presentation, the said cheques were returned dishonored vide cheque returning memo brought on record as Ex.CW1/14 to Ex.CW1/17 due to reason of "Exceeds Arrangement". The complainant has further deposed in its affidavit that upon the receipt of information regarding the dishonored cheques in question, a legal demand notice was sent to the accused brought on record as Ex.CW1/18, vide Postal Receipt Ex.CW1/19 and regd AD as Ex.CW1/20, thereby demanding payment of cheque amount in question within 15 days of receipt of notice. It has been further deposed in his affidavit by the complainant that the accused has not made the payment qua cheque in question till date, despite service of legal demand notice as abovesaid.
11. As per the oral submissions, notice under Section 251 Cr. P.C., statement of accused under Section 313 Cr. P.C. r/w Section 281 Cr. P.C. and evidence brought on CC No.140/1/14 Page no. 6 of 12 7 record, the accused has raised two major defence in this case : -
1.) that the accused had no legal liability towards the complainant as no goods were supplied as alleged by the complainant.
2.) that the accused did not receive any legal demand notice.
12. In the present case, the complainant has contended that accused being the dealer of the complainant vide dealership agreement Ex.CW1/5 were supplied with the products as reflected in the order and challans Ex. CW1/6 to Ex.CW1/10. The cheques in question Ex.CW1/11 to Ex.CW1/13 have been allegedly issued by the accused for the discharge of their liability towards the payment of the aforesaid goods. On the other hand, the accused have contended that the Hon'ble Supreme Court vide its order dt. 31.08.1999 in case titled as "M.C. Mehta Vs. Union of India" Writ Petition
(c) 4677/85,, had completely stopped the operation of the petrol pump being run by the accused persons. It has also been contended that Hon'ble Supreme Court vide its order dt. 01.12.1998 had also directed the complainant (i.e Indian Oil Corporation) to not to make any supplies at that site to the accused w.e.f 31.08.1999 itself. The aforesaid orders of the Hon'ble Supreme Court have been brought on record by the accused as Ex.DW2/1 (colly). It is pertinent to note that the said orders of the Hon'ble Supreme Court are not denied on record by the parties in the present case but it has been contended by the complainant that supply of lubricants was nevertheless made to the accused even after 31.08.1999, as in the present case despite the order of the Hon'ble CC No.140/1/14 Page no. 7 of 12 8 Supreme Court as aforesaid. The said claim of the complainant is not only in complete contravention of the directions of the Apex Court of the land itself, but, it is further to be noted that no such evidence has been brought on record by the complainant to prove that the supply of the products as alleged in the complaint had indeed been made to the accused persons at any place. While it is an admitted fact on record that the outlet of the accused was directed to be shut by the order of Hon'ble Supreme Court w.e.f. 31.08.1999, the complainant has not been able to show the delivery of goods at the said outlet or at any other place of the accused which otherwise also does not even finds mention in any of the documents brought on record as part of complainant evidence in this case.
13. Furthermore, it is to be noted that the dealership agreement Ex.CW1/5 interalia provides that the complainant corporation will make delivery of products to the dealer (i.e. the accused herein) against payment in cash or by demand draft and that the corporation may in its sole discretion agree to give such credit facilities as it deems fit to the dealer from time to time and for such periods as the corporation considers appropriate. Herein, it is to be noted that no such agreement or deal between the parties to extend any credit to the accused for the alleged supply of goods has been brought on record during the evidence to prima facie show that such credit facility was indeed extended to the accused by the complainant inspite of the dealership agreement providing for payment in cash or by demand draft in the first instance. Moreover, in such CC No.140/1/14 Page no. 8 of 12 9 cases where the credit facility was allegedly extended by the complainant to the accused and several supplies were thereon allegedly been made by the complainant to the accused at various times, the same should have been duly maintained by the complainant in form of a statement of account or ledger account to keep a track of the transaction between the parties but no such statement of accused/ledger account has also been brought on record by the complainant to prove the alleged transactions for supplies of goods in this case. The fact that the alleged invoices and challans do not even bear the signatures of any of the partners of the accused and no evidence has been brought by the complainant to prove such signatures to be of the employees of the accused further negates the claim of the complainant regarding the alleged supply of goods on receiving orders from the accused. The complainant has neither examined any of its employees who handled the alleged transactions with the accused nor the complainant has examined any transporter to prove the alleged delivery of goods to the accused.
14. In such cases, the position of the Law in this regard has very much been settled by the Hon'ble Supreme Court in its decision titled as "Rangappa Vs. Sri Mohan", 2010 11 SCC 441. In the said judgment, the full bench of the Hon'ble Supreme Court has held that "Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies". The Hon'ble Supreme Court has reiterated the CC No.140/1/14 Page no. 9 of 12 10 position of the Law laid down in "Hiten P. Dalal V s. Bratindranath Banerjee ",(2001)6 SCC16, wherein it has been held that "the obligation of the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable probability of the non-existence of the presumed fact". Finally, the Hon'ble Supreme Court has also held and reiterated its earlier decision in "Bharat Barrel & Drum Manufacturing Company V s. Amin Chand Pyarelal", (1993)3 SCC35, wherein it has been held that the "the bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the Court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that it did not exist".
15. The admitted fact that the Hon'ble Supreme Court had specifically barred the complainant from supplying any goods to the accused w.e.f 31.08.1999 and the failure of the complainant to prima facie show alleged deliveries to have been made by it to the accused in contravention of the order of Hon'ble Supreme Court as aforesaid therefore leaves the Court with no hesitation that credible and reasonable doubts have been raised by the accused and hence, the defence of the accused regarding absence of CC No.140/1/14 Page no. 10 of 12 11 liability is hereby accepted.
16. As far as the second defence of the accused as to the non receiving of the legal notice is concerned, it is to be noted that the legal demand notice Ex.CW1/18 has been sent by the complainant to the accused at the address of Willington Crescent Road, New Delhi only and not to any other address. It is pertinent to note that the outlet at the aforesaid address has been admitted to have been closed in pursuance of the order of the Hon'ble Supreme Court dt. 31.08.1999 and the complainant has not brought any other evidence on record to show that the said address was still a valid address of the accused at the relevant period of the issuance of legal demand notice. In such facts and circumstances, the Court has no hesitation in hereby arriving at the finding that issuance of legal demand notice at the address which already stood defunct cannot be termed as the valid legal demand notice served upon the accused by the complainant. Even the presumption envisaged u/s 17 of the General Clause Act cannot be invoked in such cases where the premises in question have already been ordered to be closed by the Hon'ble Apex Court inter-alia barring further operation of the outlet at the spot. Hence, the second defence of the accused regarding non service of legal demand notice is also hereby accepted in view of the aforesaid discussion.
(ii) Final order :-
CC No.140/1/14 Page no. 11 of 12 12
17. In view of the reasons discussed above, the Court has no hesitation in arriving at the finding that the complainant has not been able to prove all the ingredients of the offence u/s 138 NI act 1881, beyond the shadow of reasonable doubt. Therefore, the accused no.1 and 3 hereby stand acquitted of the offence u/s 138 NI Act.
18. Documents, if any, be released after cancellation of endorsements as per rules. P/B and S/B, if any, hereby stands discharged.
19. Be heard on the point of bail u/s 437 A CrPC separately.
Announced in the open Court on
28th October 2014 (HARUN PRATAP)
MM-01 (Central), THC/Delhi
28.10.2014
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