Delhi District Court
Nafees Ahmed vs Diwan Chand on 22 March, 2024
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IN THE COURT OF SH. KOMAL, MM (NI ACT)-08,
SOUTH DISTRICT, SAKET COURTS : NEW DELHI
CT Cases: 471119/2016
CNR NO. DLST020048322015
NAFEES AHMED
S/o-SH. SARFUDDIN,
R/o- H.No. 633, L-1, GALI NO. 12
SANGAM VIHAR,
NEW DELHI-110080. ............Complainant.
VERSUS
1. M/S DEWAN CHAND
OFFICE AT- S-11, GREATER KAILASH,
PART II, NEW DELHI-110048 ........Accused No. 1.
THROUGH ITS PARTNERS:
(1). VIKRAM,
S/o SH. TILAK RAJ,
R/o S-11, GREATER KAILASH,
PART II, NEW DELHI-110048. ........Accused No. 3.
(2). ANITA PHALPHER,
D/o- Sh. P. P. GAIND,
R/o- W-48A, GREATER KAILASH,
PART II, NEW DELHI-110048. ........Accused No. 4.
Date of Institution : 05.08.2013
Offence complained of : u/s 138 N.I. Act
Date of final arguments : 22.03.2024.
Date of decision : 22.03.2024.
Decision : Convicted.
Digitally
signed by
KOMAL
KOMAL Date:
2024.03.22
16:09:48
+0530
CT Cases 471119/2019 Page No. 1 of 15
NAFEES AHMED Vs M/S DEWAN CHAND
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Offence punishable under section 138 of Negotiable
Instruments Act, 1881
JUDGMENT
1. Vide this judgment, I shall dispose the present complaint filed u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') by Nafees Ahmed (hereinafter referred to as 'the complainant') against the accused M/S Dewan Chand (hereinafter referred to as 'the accused no. 01') through its Partners Mr. Vikram (hereinafter referred to as 'the accused no. 03') and Ms. Anita (hereinafter referred to as 'the accused no. 04') on the allegations that two cheques issued by the accused(s) were dishonoured and they failed to pay for the same despite demands made after dishonour. Before going further, it is necessary to dwell upon the brief facts of the case.
Brief facts:
2. The brief facts of this case as carved out from the complaint are that complainant is engaged in doing work of making grill, railing, etc. A job order for making staircase railing, balcony railing and ramp railing in I.I.T. Campus near Bharti Building, New Delhi with labour charge and material cost (stainless steel) was given to the the complainant by the accused(s). Accused(s) issued the cheques bearing no.264092 dated 26.02.2013 for Rs.01 lacs and no. 264093 dated 28.02.2013 for Rs.01 lacs both drawn on Canara Bank, branch- H-54, Connaught Circus, New Delhi in favour of the complainant for consideration and discharge of liabilities for the above said Digitally signed by KOMAL KOMAL Date:
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work(hereinafter referred to as the 'cheques in question'). The above said cheques on presentation were dishonoured with remarks "Exceed Arrangement" vide their respective return memos dated 28.05.2013 and 28.05.2013. Thereafter, on failure of accused to pay the cheques in question amount, a legal demand notice dated 25.06.2013 was issued to the accused which was duly served upon the accused(s) and was also replied on behalf of the accused(s) through their counsel. Despite receipt of the legal demand notice, payment of the cheques in question was not made by the accused(s) within the stipulated time of 15 days. Hence, the present complaint under Section 138 of NI Act was filed.
3. In the pre-summoning evidence, affidavit by way of evidence Ex.CW1/A was filed by the complainant. In his affidavit of evidence Ex.CW1/1, the complainant reiterated all the averments made in his complaint and relied on documents which are original cheques in question ExCW1/1 & Ex.CW1/2, return memos ExCW1/3 & ExCW1/4, office copy of legal notice ExCW1/5, postal receipts ExCW1/6 to ExCW1/9 and reply to legal notice ExCW1/10. Since sufficient material was found against the accused and cognizance in the present complaint was taken by the Ld. Predecessor Court vide order dated 22.01.2016, summons were issued and the same were returned back with report 'served'. Hence, BWs were issued against the accused(s) vide order dated 29.03.2016 which received back duly served to accused no. 03 and 04. BWs issued vide order dated 29.03.2024 against accused no. 02 received back with report 'no such person'. Proceedings against accused no. 02 were dropped vide Digitally signed by KOMAL KOMAL Date:
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order dated 24.07.2017 on the submissions of the complainant as he was not able to trace the particulars of accused no. 02.
APPEARANCE OF ACCUSED AND TRIAL
4. On 04.06.2016, the accused no. 03 and accused no. 04 appeared before the Ld. Predecessor Court and admitted to court bail subject to furnishing of personal bond in sum of Rs. 10,000/- with one surety in the like amount. Thereafter, the matter was referred to the mediation center for 09.01.2017 and from wherein the matter received back unsettled on 22.03.2017. Thereafter, notice u/s 251 Cr.P.C. was framed upon the accused no. 01, accused no. 03 and accused no. 04 on 08.05.2017 wherein, accused(s) pleaded not guilty and claimed trial. In reply to the notice u/s 251 Cr.P.C, it was stated by the accused no. 03 that the cheques in question were given for the construction work done by the complainant, and the amount is already been paid to the complainant after dishonour of the cheques. The accused no. 03 denied existence of any liability towards the complainant. In reply to the notice u/s 251 Cr.P.C, it was stated by the accused no. 04 that she is only a sleeping partner in the partnership firm and she owes no liability towards the complainant.
5. Given the nature of the allegations and reply of the accused(s) u/s 251 CrPC, this Court directed that the case shall be tried as a Summons case under Chapter XX of Cr.P.C.
6. Thereafter, the oral request made on behalf of the accused(s) U/s 145(2) NI Act to cross examine complainant and his witnesses was allowed vide order dated 08.05.2017 and the Digitally signed by KOMAL KOMAL Date:
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accused was given an opportunity to cross examine the complainant and his witnesses. Thereafter, the matter was fixed for CE for 24.07.2017.
EVIDENCE ON BEHALF OF THE COMPLAINANT
7. The complainant examined three witnesses including himself in support of his case.
7(i). On 24.07.2017, the complainant examined himself as CW-1 and adopted his evidence by way of affidavit Ex.CW1/A tendered at the time of pre-summoning evidence wherein averments made in the complaint were reiterated. He had relied upon the documents which are from Ex.CW1/1 to Ex.CW1/10 as mentioned in his pre-summoning evidence. CW-1 was duly cross-examined by the learned counsels for the accused(s) on 24.07.2017, 29.05.2018, 27.08.2018 and 15.10.2018. During his cross-examination, CW-1 stated that the cheques in question were given for payment towards the work done and were not advance as security cheques. The liability was around Rs.5,50,000/- to 5,60,000/- but he had received about Rs.2,80,000/- from the accused(s). CW-1 further produced a set 08 photographs Ex.CW1/11(colly) taken from the phone of worker, Mr. Anis Ahmad showing the work done by him at the site of accused. Witness stated that he was not aware whether the accused no. 04 was a sleeping partner of the accused no. 01 or not. Witness stated that cheques were issued to him after finalization of bill and he can produce the same, however, later on stated that he had no hisab kitab with him, however, the same Digitally signed by KOMAL KOMAL Date:
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was done with the accused(s). After due cross-examination, witness, CW-1 was discharged vide order dated 15.10.2018.
7(ii). On 19.01.2019, witness CW-2, Mr. Anis Ahmad tendered his evidence by way of affidavit bearing exhibit Ex.CW2/A wherein he acknowledged working with the complainant at the accused's site i.e. I.I.T. Campus, Near Bharti Building, New Delhi for nearly one and half month. On the same date, CW-2 was duly cross-examined by the learned counsel for the accused(s). In his cross-examination, he asserted the fact of taking photographs i.e. Ex.CW1/11(colly) of the site by his phone. Witness also produced certain photographs Ex.CW2/X1 wherein Mr. Saleem was seen. He also stated that one or two cheque(s) was given in his presence to the complainant, however, he was not able to tell about exactly when and which cheques were given. After due cross-examination, CW-2 was discharged vide order dated 19.01.2019.
7(iii). On 08.03.2019, CW-3, Mr. Saleem tendered his evidence by way of affidavit bearing exhibit Ex.CW3/A wherein he acknowledged working with the complainant at the accused's site i.e. I.I.T. Campus, Near Bharti Building, New Delhi for nearly one and half month. On the same date, CW-2 was duly cross-examined by the learned counsel for the accused(s). After due cross-examination, CW-3 was discharged vide order dated 08.03.2019.
7(iv). Thereafter, CE was closed vide order dated 08.03.2019 by a separate statement of the complainant and the Digitally signed by KOMAL KOMAL Date:
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matter was fixed for recording statement of the accused(s) under Section 313 Cr.P.C.
8. Statement of accused no. 03 and 04 under Section 313 Cr.P.C was recorded on 20.05.2019 wherein, all material facts existing on record including the exhibited documents were put to them. Accused no. 03 stated that the cheques in question were signed by him and the legal demand notice was received by him.
The accused no. 03 pleaded that he had already paid the complainant sufficiently for the work done by him and had no liability left towards the complainant. He further stated that the complainant had left the job midway and left the work incomplete. The complainant was asked to return the impugned cheques, however, he did not return the same. Accused no. 04 pleaded that she is a sleeping partner in the accused partnership firm and is not involved in dealing with its day to day affairs. She further stated that she was neither aware of the purpose of issuance of impugned cheques nor aware of receiving of the legal demand notice by the partnership firm. She denied receiving of legal demand notice and owing any legal liability against the two cheques in question. Accused no. 03 and accused no. 04 further expressed their desire to lead defence evidence. Thereafter, the matter was fixed for defence evidence for 27.07.2019.
EVIDENCE ON BEHALF OF THE ACCUSED(s)
9. The accused(s) chose to lead defence evidence and examined two witnesses that are: DW-1, Mr. Vikram (accused no. 03) and DW-2, Mr. Rajesh Kumar Daga (Accountant in the accused firm) to support their case. Digitally signed by KOMAL KOMAL Date:
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9(i). On 21.09.2019, witness DW-1 was examined-in- chief. In his examination-in-chief, he stated that the complainant had left the work incomplete and therefore he had to hire other agency for completion of the same. He produced photocopies of documents bearing Ex.DW1/2(colly) showing details of the material supplied and photocopies of document bearing Ex.DW1/3(colly) showing ledger account of the complainant in the books of accused firm alongwith vouchers/receipts of payments made to the complainant. The impugned cheques were handed over by his staff to the complainant for bringing certain material which was not brought by the complainant. DW-1 was duly cross-examined and discharged vide order dated 18.11.2019.
9(ii). On 25.01.2020, DW-2 was examined-in-chief. In his examination-in-chief, he stated that he works as an Accountant in the accused firm. He further stated that Rs.3,70,000/- was paid in cash on multiple occasions to the complainant and the receiving of the same was taken on vouchers. Witness produced original of ledger account, the copies of which are Ex.DW1/3. In his cross-examination, he stated that the impugned cheques were demanded back from the complainant but complainant informed Mr. Vikram in my presence that the said cheques were misplaced. DW-2 was discharged vide order dated 18.07.2022.
9(iii). Thereafter, DE was closed vide order dated 18.07.2022 by a separate statement of the accused. Thereafter, the matter was fixed for final arguments. Rival submissions were heard on behalf of both the parties.
Digitally signed by KOMAL KOMAL Date:
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ARGUMENTS
10. Ld. Counsel for the complainant, has argued that all the ingredients of Section 138 NI Act have been fulfilled in the present case and the complainant has duly proved his case and hence prayed that the accused be convicted. He submitted that the legal liability has been proved by way of original cheques, return memos, legal notice and tracking receipt placed on record. Other contentions raised are summarized below:
Ld. counsel for the complainant submitted that it is stated by accused no. 01 through accused partner no. 03 in his reply to notice u/s 251 CrPC that he had made payments to the complainant post dishonour of cheques for the work done by him, however, no evidence of such payment is shown.
It is further submitted that the accused no. 03 had stated in statement u/s 313 CrPC and as DW-1 that complainant had left certain work incomplete and he is adequately paid for the work done. However, no proof of incomplete work or adequate payment for the work done is put before the Court.
He further submitted that merely stating that the cheques were given for procuring material and they were later misused, is only a convenient defence as no complaint for misuse of cheques is made before any authority. Per contra, Ld. counsel for the accused(s), has argued that the cheques in question were issued by the accused(s) for buying material, however, the material cost was later paid to the complainant in cash. Additional grounds raised are Digitally signed by KOMAL KOMAL Date:
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as follows:
Ld. counsel for the accused contended that the complainant had been paid for the work done and there is no outstanding to be paid by the accused(s) to the complainant.
POINTS OF DETERMINATION:
11. The following points of determination arise in the present case:
a. Whether the complainant is successful in raising the presumptions under Section 118 read with Section 139 of NI Act?
b. If yes, whether the accused has been successful in raising a probable defence?
THE LAW APPLICABLE:
12. I have given my thoughtful consideration to the rival submissions of the Ld. counsels from both sides and have also perused the record. Before appreciation of evidence led on behalf of the parties, at the very outset, I would like to narrate the legal principles relevant for adjudication of complaint under Section 138 of NI Act.
The Hon'ble Supreme Court of India in Basalingappa v. Mudibasappa, 2019 SCC OnLine SC 491 at page 422 held as follows :
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for Digitally signed by KOMAL the discharge of any debt or other liability. KOMAL Date:
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(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. 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 they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
The three-judge bench of the Hon'ble Supreme Court in Rangappa v. S. Mohan, (2010) 11 SCC 441 has ruled that existence of liability itself is a presumption of law. It held as under:
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability."
The Hon'ble Supreme Court of India in C.C. Alavi Haji v. Palapetty Muhammed, (2007) 3 SCC (Cri) 236 at page 565 held as follows:
"A 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 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 GC Act and Section 114 of the Evidence Act."
APPRECIATION OF EVIDENCE AND FINDINGS Digitally signed by POINT OF DETERMINATION NO. 1:
KOMAL KOMAL Date:
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13. In this case, issuance of cheques, its presentation and dishonorment are not in dispute, inasmuch as the same have been duly proved on the basis of cogent evidence.
14. The signature on the cheques in question Ex.CW1/1 and Ex.CW1/2 is admitted by the accused. The aforesaid cheques in question were returned vide return memo bearing Ex.CW1/3 and Ex.CW1/4. The legal notice bearing Ex.CW1/5 was sent to the accused(s) vide postal receipts bearing Ex.CW1/6 and the same was replied by the accused Ex.CW1/10. This Court is thus of the opinion that the legal demand notice was duly received by the accused(s).
15. In view of the abovementioned circumstances, the presumptions under sections 139 and 118 NI Act that the cheque in question was for a legally recoverable debt/liability stands activated.
16. Accordingly, the point of determination no.1 is decided in affirmative.
POINT OF DETERMINATION NO. 2:
17. The burden to disprove the existence of legal liability is upon the accused. This may be done by poking holes in the case of the complainant or by leading positive evidence in defence.
18. As far as the defence evidence is concerned, the DW-1 deposed that the cheques were given for buying material as the complainant was engaged in construction on their behalf. The Digitally signed by KOMAL KOMAL Date:
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accused was later paid in cash for the work done and nothing outstanding remains to be paid.
19. The main defence of the accused(s) pivots around having already paid complainant his outstanding or rather more. The Ex.DW1/2(colly) is furnished by accused no. 03 to show payments made to the complainant. According to Ex.DW1/2, accused had paid an amount of Rs. 3,70,000/- to the complainant.
It is submitted by the complainant in the complaint that the cheques were given for job order, labour charge and material cost. A careful pursual of Ex.DW1/2 reveals that accused had paid the complainant for material cost, however he is silent about the labour charges of the complainant. In Ex.DW1/2 (page 8), at point 'X' an amount of Rs. 1,86,713/- is written, no proof of its payment is shown by the accused. Merely paying for the material and not for labour charges does not absolve the liability of the accused. Moreover, as per details of payment statement, no vouchers of the date 07.02.13, 04.03.13 and 16.03.13 are placed on record. It shows that complete payment to the complainant for the work done was never made.
20. The accused has never made any complaint of non- returning of cheques to any authority. Further, as stated in reply to notice u/s 251 CrPC by the accused no. 03, he had made payment to the complainant post dishonour of cheques, no proof of such payment is shown. Moreover, relation between the parties is already admitted and there is no iota of doubt that complainant was working on the instructions of the accused. Further, it is for the accused to prove that complainant left the work incomplete, which he never did. The bills, ledger and vouchers placed on Digitally signed by KOMAL KOMAL Date:
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record through Ex.DW1/2 are for material cost only and labour charges are never shown to be paid. The accused no. 04 had stated in the notice u/s 251 CrPC that she is a sleeping partner in the firm, however no evidence is ever led by her in this regard to prove that she was never participating in the day to day affairs of the firm. The accused no 04 had never proved herself to be a sleeping partner.
21. In the event of failure to discredit the complainant, something more should have been brought on record by the accused(s) to prove his case or demolish the case of the complainant. In the absence of any evidence disproving the debt or liability or elucidating any material circumstances that weaken the case of the complainant, it is patent that the accused has miserably failed in discharging the burden of rebutting the statutory presumptions in the instant matter.
22. Accordingly, in light of the aforesaid discussion, the point of determination no.2 is decided in negative.
Conclusion:
23. In view of the above discussion, this Court is of the considered opinion that the complainant has duly proved its case against the accused(s) for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 qua accused no. 01, 03 and 04. The accused(s) has miserably failed to rebut the said presumption by raising a probable defence. The accused no. 01, 03 and 04 are hereby convicted for the offence punishable under Digitally signed by KOMAL KOMAL Date:
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Section 138 NI Act qua the cheques in question in the present case.
24. Let a copy of the judgment be provided to the convict free of cost.
ANNOUNCED IN THE OPEN Digitally
COURT ON 22.03.2024.
signed by
KOMAL
KOMAL Date:
2024.03.22
16:12:33
+0530
(KOMAL)
MM-08(NI Act),South
Saket/NewDelhi/22.03.2024
Certified that this judgment contains 15 pages and each page bears my signature. Digitally signed by KOMAL KOMAL Date:
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