Delhi District Court
Sh. Gaurav Saxena vs M/S Arsh Electronics Pvt Ltd & Anr on 11 March, 2015
IN THE COURT OF METROPOLITAN MAGISTRATE
MUNICIPAL MAGISTRATE01, KKD, EAST, NEW DELHI
Presided by : Ms. Deepti Devesh
Complaint No. 10/13
Unique ID No. 02402R015362013
PS: Kalyan Puri
Sh. Gaurav Saxena
S/o Sh. Anil Kumar Saxena,
Proprietor of M/s Blue Bird Water Co.
At S1/201A, NItikhand1,
Indirapuram, Ghaziabad(U.P.) ........Complainant
VERSUS
M/s Arsh Electronics Pvt Ltd & Anr
through its authorized signatory
Ms. Shruti Rishi
D/o Sh. Yasuvir
R/o 224 Surya Niketan,
Vikas Marg Extension,
Delhi92 ........Accused
Complaint under section 138 of the Negotiable
Instruments Ac t
Offence complained of : U/s 138 NI Act
Date of commission of offence : 04.01.2013
Plea of Accused : Not guilty
Final Arguments heard & Concluded on : 10.02.2015
Date of decision of the case : 11.03.2015
Final Order : Acquittal
CC No. 10/13 page no. 1 /12
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE:
1 Vide this Judgment I shall finally dispose off this complaint U/s 138 NI Act by complainant Sh. Gaurav Saxena against the accused M/s Arsh Electronics Pvt Ltd and its authorized signatory Ms. Shruti Rishi. The complainant's story in brief is that the accused company had business transactions with the complainant and the accused company had purchased goods from the complainant from time to time and as per the accounts of the complainant, the accused was liable to pay Rs.86,400/ to the complainant towards goods received by the accused from the complainant vide bill / cash memo dated 09.11.2012. In order to repay the outstanding amount, the accused issued a post dated cheque bearing no.700701 dated 25.11.2012 of Rs.86,400/ drawn on SBI, Anand Vihar branch in favor of the complainant and had assured the complainant that the same shall be honored on its presentation. The said cheque was presented by the complainant which was returned vide return memo dated 01.12.2012 with endorsement of "Payment stopped by drawer". Thereafter the complainant issued legal notice dated 18.12.2012. The complainant has also stated that despite service of the legal notice the accused did not make any payment in discharge of her liability.
2 After the filing of the complaint and closing of presummoning evidence, vide order dated 30.01.2013, summons were issued to the accused for the offence U/s 138 NI Act. The accused was admitted to bail on 20.02.2013. Thereafter notice U/s 251 Cr. PC was framed upon the accused on 20.02.2013 to which she did not plead guilty and claimed trial.
3 Application U/s 145(2) NI Act was filed by the accused on 12.03.2013, which was allowed vide order dated 07.06.2013. Thereafter the matter was fixed for CE.
4 In order to prove its case, the complainant examined himself as CW1 who reiterated the contents of the complaint on Oath and filed evidence by way of CC No. 10/13 page no. 2 /12 affidavit. CW1 exhibited original bill / cash memo no.102 dated 09.11.2012 as Ex. CW1/A, original cheque bearing no. 700701 dated 25.11.2012 as Ex. CW1/B, return memo dated 01.12.2012 as Ex. CW1/C, legal notice dated 18.12.2012 as Ex. CW1/D, Registered post receipt as Ex. CW1/E, returned AD card as Ex. CW1/F & document regarding proprietorship of the complainant firm as Ex. CW1/G. Thereafter CW1 was cross examined and discharged on 04.03.2014. The complainant evidence was closed.
5 After that on 02.04.2014 the accused was examined U/s 313 Cr. PC and her statement was duly recorded. All the incriminating evidence were put to the accused, to which the accused submitted that she is a director and authorized signatory of the accused company but not responsible for its day to day affairs. She also denied any outstanding amount of Rs.86,400/ towards the complainant and stated that the cheque in question was issued only as a security. She further stated that the goods supplied by the complainant were not upto the mark and hence the accused company had gotten the payment of the cheque in question got stopped. She also denied receiving legal notice from the complainant. The accused also stated that she wanted to lead defense evidence.
6 Accused examined the CEO of the accused company as DW1. He stated in his examination in chief that he has been authorized to depose as a witness vide board resolution dated 04.07.2014 Ex. DW1/1. He deposed that the accused company is a supplier to ONGC, Noida and that the complainant had approached the accused company with a machine that was a water softener and a scale mover, that could reduce the hardness of water in Noida. He further deposed that the complainant initially provided two scale mover water softeners on 09.05.2011, which were not working properly and therefore, the complainant suggested that the accused company buy high capacity scale mover water softeners. Thereafter, the accused company supplied equipment given by the complainant to ONGC with the condition that payment for the equipment shall be made to the complainant only after 23 weeks of installation after the equipment CC No. 10/13 page no. 3 /12 was found to be satisfactory. However, advance of Rs.25,000/ in cash was paid to the complainant for the equipment. He further deposed that on 07.11.2012 the complainant supplied the equipment, took Rs.25,000/ in cash as advance and also took the cheque in question as blank signed security cheque. He further deposed that the equipment supplied by the complainant was not working properly and then the complainant visited the site on 25.11.2012 in the presence of the accused's company technician Mr. Baleshwar. Mr. Baleshwar showed the rusting of the heating element to the complainant and some photographs of the rusting element were also taken on 14.09.2013 which were exhibited as Ex. DW1/2 (colly). He further deposed that the complainant then tried to bribe Mr. Baleshwar so that he can falsely tell DW1 that the equipments were working satisfactorily. Thereafter he deposed that on 25.11.2012 he informed the complainant by email to take back the equipments and also return the advance amount and security cheque which was exhibited as Ex. CW1/3. When the complainant did not return the cheque in question, the accused company issued stop payment instructions on 26.11.2012. He further deposed that the equipments supplied by the complainant is still not working which was also proved by testing on 15.07.2014 through Delhi Water & General Test Lab, Ranjit Nagar, Delhi. Thereafter DW1 was cross examined and discharged on 24.11.2014.
7 Accused then examined employee of the accused company Baleshwar as DW2. He deposed that he has been working with the accused company for last 45 years and was posted presently at ONGC site in Noida. He further deposed that the equipments supplied by the complainant at ONGC site was not functioning properly, which was installed on 08.11.2012. He also deposed that the equipments was checked on 20.11.2012 & 24.11.2012 and the complainant had also visited and checked the machine on 25.11.2012, but the same was not functioning properly. He further deposed that he had personally informed the complainant that the machines were not working properly and also informed him on telephone several times. He further placed on record the call records for his telephonic conversation with the accused and the complainant which were CC No. 10/13 page no. 4 /12 exhibited as Ex. DW2/1 & Ex. DW2/2. He also deposed that the complainant had tried to bribe him on 25.11.2012 for sending positive report to the accused company regarding the equipments. Thereafter, he was cross examined and discharged on 14.01.2015.
8 Accused then examined private expert from Delhi Water & General Test Lab Pvt Ltd, namely Rakesh Tiwari as DW3 and Guddan Singh as DW4. DW3 deposed that he had personally visited the ONGC site to collect water samples for testing and photographs were also taken on 15.07.2014 which were placed on record and exhibited as Ex. DW3/1. DW4 deposed that he had prepared the test report in respect of the samples taken from ONGC site which was placed on record and exhibited as Ex. DW4/1 & Ex. DW4/2. He also placed on record the site report certificate which was exhibited as Ex. DW4/3. Thereafter, DW3 & DW4 both were cross examined and discharged on 14.01.2015 and defense evidence was also closed and matter was fixed for final arguments.
9 Final arguments were addressed and heard on behalf of both the parties. Ld. Counsel for the complainant has reiterated the averments made in the complaint. He has argued that the accused has failed to disclose any defense. Therefore all ingredients of U/s 138 NI Act stands fulfilled and the accused is liable to be convicted.
10 On the other hand, the Counsel for the accused has argued that the present complaint should be dismissed as there is no legal liability upon the accused to pay the complainant as the equipments supplied by the complainant was not working properly and payment was to be made only after satisfactory working of the equipment. Counsel for the accused has further stated that the cheque in question was issued as a security cheque only. Counsel for the accused has also filed written arguments on behalf of the accused reiterating the oral arguments advanced and has also relied upon the following case laws:
CC No. 10/13 page no. 5 /12i) Krishan Janardhan Bhatt v. Dhattarya G. Hegde 2008 (4) SCJ 749
ii) K. Prakashan v. P.K. Surenderan 2007 (4) Crimes 217 SC,
iii) Kamal Gen Store v. Kishori Lal 2009 Cr. L.J 882 H.P.
11 Arguments advanced by both the parties have been heard at length. I have also perused the judicial record.
12 For offence U/s 138 NI Act the necessary ingredients to be proved are:
a) That the accused had a legal liability / debt towards the complainant.
b) That the accused issued a cheque in discharge of the said legal liability / debt.
c) That the accused was maintaining a bank account for the cheque issued by him.
d) That the cheque was presented by the complainant within its validity period.
e) That the cheque was dishonored on his presentation.
f) That the complainant issued legal demand notice within 30 days from
the date of dishonor of the cheque.
g) That the accused failed to pay within 15 days of receipt of legal
demand notice.
If the above ingredients are proved then an offense punishable U/s 138 NI Act is committed.
13 In the present case, the accused has stated that the cheque in question was given as security with the understanding that the same was to be encashed by the complainant only if the equipment supplied by the complainant functioned properly. The accused has reiterated said defense in her examination U/s 313 Cr. PC and has also corroborated the same by leading defense evidence. The accused has admitted receiving legal notice from the complainant in notice framed U/s 251 Cr. PC but has denied receiving the same in her statement CC No. 10/13 page no. 6 /12 recorded U/s 313 Cr. PC. Due to this contradiction, it is hard to believe that the accused did not receive legal notice. Furthermore the presumption of delivery of legal notice is in favour of the complainant. Even if it is assumed that legal notice was not served upon the accused persons, yet as per the Hon'ble Apex Court Judgment in C.C. Alavi Haji v. P. Mohammad (2007) 6 SCC 555, it is no longer pre requisite that service of legal notice has to be proved. Even if the service of legal notice is not proved, then receipt of the summons on the complaint is sufficient to raise the cause of action U/s 138 NI Act in favour of the complainant. Hence, the disputed question to be decided is whether the cheque in question was issued in discharge of legal liability / debt to the complainant or was merely a security cheque.
14 Now, the question of liability of the accused to pay the complainant shall be dealt with. In the present case the complainant has averred that the cheque in question was issued against discharge of liability arising out of bill Ex. CW1/A for supply of scale mover water softener to the accused company. Since the cheque in question is bearing the name of the proprietorship of the complainant and the present complaint has been filed by the complainant in his own name therefore, presumption arises U/s 118A & 139 NI Act in favour of the complainant that the cheque was issued in discharge of a legal liability. Thus, the onus to rebut this presumption is on the accused. The accused has disputed her legal liability to make payment on the ground that the cheque in question was a security cheque and that the water softener supplied by the complainant was not functioning properly, hence, the accused company was not liable to make any payment to the complainant.
15 It is true that for offense U/s 138 NI Act, the accused is not expected to prove his defense beyond reasonable doubt in order to rebut the statutory presumption. Same has been held by Hon'ble Supreme Court in Kumar Exports v. Sharma Carpets (2009) 2 SCC 513. It is also well settled law that in order to rebut the statutory presumption in favour of the complainant, the accused need CC No. 10/13 page no. 7 /12 not examine himself in evidence or adduce any other defense evidence also. The accused can rebut the statutory presumption on the material already available on record. The same has been held by the Hon'ble Supreme Court in Krishna Janardan Bhat v. Dattatraya G. Hegde 2008 Cri.L.J 1172 (SC). Now it is to be examined whether the accused has been able to rebut the statutory presumption on the basis of preponderance of probabilities.
16 The major defense put forth by the accused is that the product supplied by the complainant was not working satisfactorily and therefore no payment was due to the complainant. The complainant has denied that the product supplied by him was not working properly and has also denied that the payment was subject to satisfactory performance of the product. The complainant has however admitted in his crossexamination that he had assured the accused company that he would replace or repair the product in case it was not working properly. He has further admitted to presenting the cheque in question after the installation of the product at the site of the accused company. Furthermore, the complainant has also admitted that he had taken the present cheque in question which was a post dated cheque for the product given to the complainant. If the complainant's story is to be believed that the payment for the product had nothing to do with the performance of the product, then no reasonable explanation has been given by the complainant in his entire crossexamination, to show why the cheque in question was not immediately presented for encashment or why the complainant accepted a post dated cheque for payment when the payment became due on supply and installation of product itself i.e. on 08.11.2012, which is the date of installation of product. Furthermore, the complainant has admitted in his crossexamination that he had received complaint regarding the performance of the product from the accused company when he had asked about payment for his product, which shows that payment for the product was actually linked to the performance of the product.
17 Coming to the question whether the product was working CC No. 10/13 page no. 8 /12 satisfactorily or not, it is seen that the complainant has contradicted himself in his crossexamination, wherein at one place he has stated that the product given was not a water softener and only a scale and rust remover, while at another place he has admitted that the product was a water softener and the functioning could be determined by observing the water which would become soft. This is a material contradiction in the testimony of the complainant as the complainant does not appear to be sure about the function of the product supplied, which itself is sufficient to create doubt that the product was fulfilling the purpose for which it was supplied. The complainant has further admitted that he had received complaint regarding working of product and had infact also visited the site of the accused company on 25.11.2012 to inspect the product. However, he has denied that upon inspection he had found the product was not functioning properly.
18 The accused has however, produced evidence to show that the product supplied by the complainant was not working properly. The accused has examined it's own technician who has deposed that the product given by the complainant was not working properly. Nothing has come on record in the cross examination of the said witness which discredits his testimony. He has reiterated in his crossexamination that the product given by the complainant did not function properly due to excessive scaling. Infact, even if the complainant is to be believed that the product was only a scale remover and not a water softener, then also the testimony of the said witness clearly established that the product was not removing scaling efficiently. Furthermore, the accused has also placed on record test reports from private expert showing that the water quality did not improve even after use of the product of the complainant. Nothing has come on record in the crossexamination of the private expert to show that the test report is manufactured at the behest of the accused company or that it is not credit worthy. Hence, on the basis of the above evidence the accused has succeeded in establishing that the product of the complainant was not working properly on the basis of preponderance of probability.
CC No. 10/13 page no. 9 /1219 The accused has also taken the defense that the cheque in question was a security cheque only and that the accused had given the cheque in question in blank signed condition to the complainant. The accused has reiterated this defense consistently in the notice framed U/s 251 Cr. PC, statement recorded U/s 313 Cr. PC and is also corroborated by the evidence of the CEO of the accused company i.e. DW1. Infact the complainant has also admitted in his crossexamination that the cheque in question was filled in by the employee of the accused company namely Mr. Digamber and not by the accused herself. There is no explanation given by the complainant as to why the cheque in question was filled by another person, when the accused was the authorized signatory of the accused company and also signed the cheque in question. It only fortifies the claim of the accused that the cheque in question was actually issued in blank signed condition because it was a security cheque. Infact, this claim of security cheque is further corroborated by the fact that the complainant has admittedly received the cheque in question on 09.11.2012 and actually presented the same for encashment on 29.11.2012. The gap between the date of receipt of cheque in question, the actual date on the cheque in question i.e. 25.11.2012 and actual date of presentation of the cheque in question establishes that the cheque was not meant for payment but only a security cheque. Further, the complainant has admitted in his crossexamination that even before presenting the cheque in question, he had asked the accused company. The complainant has not offered any explanation on why he needed to ask for payment for the product, when the cheque in question was already in possession of the complainant, if the same was meant for payment and not for security. The complainant has also admitted in his crossexamination that he had visited the site of the accused company after the date mentioned on the cheque in question. This further establishes that the cheque in question was only meant for security as the cheque in question was not even presented before the visit by the complainant and it was only after the visit, that the complainant presented the cheque in question. From the above discussion, the accused has been able to establish the defense of security cheque CC No. 10/13 page no. 10 /12 on the basis of preponderance of probabilities.
20 Further, the defence of the accused is supported by the fact that like any reasonable, prudent person, accused company had issued stop payment instructions for cheque in question, when the accused company became aware that the product of the complainant was not functioning properly. Infact the accused has produced email dated 25.11.2012 Ex. DW1/3 addressed to the complainant wherein it has been informed to the complainant that the accused company is issuing stop payment instructions for the cheque in question. The complainant has not disputed Ex. DW1/3 as not even a suggestion that Ex. DW1/3 is a false document has been put to DW1 in his crossexamination. Therefore, Ex. DW1/3 has been deemed to be admitted by the complainant. Ex. DW1/3 clearly establishes that the cheque in question was a blank cheque, which was to be returned along with advance of Rs.25,000/ in case the product of the complainant does not work properly. Hence, stop payment instructions and Ex. DW1/3 clearly established that the defense of the accused is a probable defense, which is sufficient to rebut the statutory presumption in favour of the complainant.
21 In view of the above discussion, the complainant has been unable to prove the legal liability / debt of the accused towards the complainant and the present complaint is liable to be dismissed on this ground alone. Hence, the defense of the accused that the cheque was given in blank signed condition as security to the complainant and that the same has been misused appears to be probable and credible defense. It is well settled that even though the statutory presumption for offense U/s 138 NI Act is in favour of the complainant, still, the prosecution is burdened with standing on its own legs and has to necessarily prove its case beyond reasonable doubt. In the instant case blank signed cheque as security and dissatisfactory functioning of the product supplied by the complainant are enough to puncture holes in the complainant's story. Cumulatively, the above circumstances are sufficient to rebut the presumption CC No. 10/13 page no. 11 /12 arising in favour of the complainant U/s 139 NI Act. Accordingly, accused M/s Arsh Electronics Pvt Ltd and its authorized signatory Ms. Shruti Rishi D/o Sh. Yasuvir, R/o 224 Surya Niketan, Vikas Marg Extension, Delhi92 stands acquitted of the offence under section 138 NI Act.
Accused is directed to furnish bailbond and surety bond in the sum of Rs.10,000/ U/s 437A Cr. PC for the next Six month.
Announced in the open court
today i.e.11.03.2015 (DEEPTI DEVESH)
MM:KKD:DELHI:11.03.2015
Containing 12 pages all signed by the presiding officer.
(DEEPTI DEVESH) MM:KKD:DELHI:11.03.2015 CC No. 10/13 page no. 12 /12