Delhi District Court
Supreme Court, Hiten P. Dalal vs . Bratindranath Banerjee (2001) 6 on 26 May, 2022
IN THE COURT OF SH. VIKAS MADAAN, METROPOLITAN
MAGISTRATE (NI ACT), NORTH-WEST, ROHINI, DELHI
CNR No. DLNW020006962009
CC No. 10446-2016
M/s Kanodia Technoplast (P) Ltd.
A-54, Wazirpur Industrial Area,
Delhi-110052
............Complainant
Versus
Vinay Kapoor, Proprietor,
M/s Classic Creations,
W-12/3, Western Avenue, Sainik Farms,
Delhi-110062
.............Accused
JUDGMENT
(1) Name of the complainant, : M/s Kanodia Technoplast (P) Ltd.
(2) Name of accused, : Vinay Kapoor
(3) Offence complained of or
proved : 138 N.I. Act
(4) Plea of accused : Pleaded not guilty
pg. 1 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016
(5) Date of institution of case : 13.10.2009
(6) Date of reserve of order : 28.04.2022
(7) Date of Final Order : 26.05.2022
(8) Final Order : Convicted
TABLE OF CONTENTS
A. Factual Matrix....................................................................3 B. Pre-summoning Evidence & Notice...........................................4 C. Complainant's Evidence........................................................4 D. Statement of Accused............................................................5 E. Defence's Evidence...............................................................5 F. Ingredients of Offence and Discussion.......................................6 I. Contentions in relation to non-fulfilment of second ingredient a. Contention 1: Goods supplied were of substandard quality b. Contention 2: Discrepancy in bill amount and cheque amount G. Conclusion ..............................................................................................12 BRIEF FACTS RELEVANT FOR THE DECISION OF THE CASE A. FACTUAL MATRIX pg. 2 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016
1. Vide this judgment I shall dispose of the complaint filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act ').
2. The substance of the allegations, as contained in the complaint, are as follows:
a. The complainant is a Private Limited company and accused is the sole proprietor of M/s Classic creations. The complainant claims that the accused had placed an order dated 05.05.2009 for purchase of goods and complainant after accepting that order supplied the goods of the value of Rs. 2,13,890/- vide invoice no. 348 dated 17.05.2009 to the him. That a postdated cheque for an amount of Rs. 1,87,680/- drawn on DBS Bank Ltd., Branch Barakhambha Road, New Delhi was also sent by the accused to the complainant.
b. Upon presentment, the said cheque first got dishonoured on 17.06.2009 due to the reason "funds insufficient" and then again got dishonoured due to the reason "payment stopped by the drawer" vide return memo dated 14.08.2009. Thereupon, a legal demand notice dated 31.08.2009 was sent to the accused through registered A.D and U.P.C. and it is the case of the complainant that despite service of notice, accused failed to pay the cheque amount within stipulated time.
B. PRE-SUMMOING EVIDENCE & NOTICE
3. Pre-summoning evidence was led by the complainant and upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of the Act and notice under pg. 3 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016 Section 251 Cr.P.C. for this offence was framed upon accused to which he pleaded not guilty and claimed trial. He took the defence that post-dated cheque was given to the complainant in lieu of goods purchased by him. He further stated that the material supplied to him was defective and due to this reason, he stopped the payment of the cheque. He further stated that he had made several efforts to contact the complainant to let them saw the defective material. He admitted that legal notice was received by him.
4. Thereafter, the accused moved an application u/s 145(2) NI Act which was allowed vide order dated 03.02.2012 and the complainant was allowed to be cross-examined by the accused.
C. COMPLAINANT'S EVIDENCE
5. In his evidence, complainant examined its Manager Marketing as CW1. He relied upon his pre-summoning evidence towards post- summoning evidence which is Ex. CW1/A. He relied upon the following documentary evidence against the accused to prove his case beyond reasonable doubt: -
Ex. CW1/1 Certificate of incorporation
Ex. CW1/2 Minutes of meeting
Ex. CW1/3 Bill
Ex. CW1/4 Cheque bearing no. 186780 dated 15.06.2009
Ex. CW1/5 Return Memo dated 14.08.2009
Ex. CW1/6 Legal notice
Ex. CW1/7 Original Postal Receipts
Ex. CW1/9 U.P.C
Ex. CW1/10 Acknowledgement
&CW1/11
D. STATEMENT OF ACCUSED
pg. 4 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016
6. Statement of the accused was recorded under section 313 Cr.P.C on 08.01.2015 wherein all the incriminating evidences were put up before the accused. In reply, he stated that order for purchasing the goods were placed by him and a post-dated cheque bearing his signature was also sent by him to the complainant. He further stated that the contents of the cheque were filled by his staff. He further stated that the goods delivered by the complainant were of substandard quality and thus, he gave instruction to his bank to stop the payment of the cheque. He further stated that despite making repeated request none was turned up on behalf of the complainant to inspect the substandard goods. He further stated that legal notice was received by him and he also gave its reply along with the photographs of the goods. He further wished to lead defence evidence.
E. DEFENCE'S EVIDENCE
7. In his defence evidence, accused examined himself as DW-1 and one Sh. S.P Yadav as DW-2. They were further subjected to cross- examination by the Ld. counsel for the complainant.
8. Thereafter final arguments heard on part of both the Ld. counsel for the complainant and accused. I have heard the rival contentions of both the counsel and given my thoughtful consideration to the material appearing on record.
F. INGREDIENTS OF OFFENCE AND DISCUSSION
9. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfil all the essential ingredients of the offence.
pg. 5 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016 Perusal of the bare provision reveals the following necessary ingredients of the offence: -
First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonor of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
10.The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co-extensively. In addition to the above, the condition stipulated under section 142 NI Act have to be fulfilled.
11.Notably, there is no dispute at bar about the proof of first, third, fourth and fifth ingredients. The complainant had proved the cheque bearing no. 186780 vide Ex. CW1/4 as accused himself admitted his cheque. The cheque in question was return unpaid vide return memo Ex. CW1/5 with remarks "Payment stopped by the pg. 6 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016 drawer" was also duly proved. The complainant had proved on record the legal notice vide Ex. CW1/6 and the notice was duly sent was proved vide Ex. CW1/7, CW1/8 and CW1/9 as duly proved by the fact that accused has himself admitted that he was in receipt of legal demand notice. As such, on the basis of above, the first, third, fourth and fifth ingredient of the offence under section 138 NI Act stands proved against the accused.
12. The controversy in the present complaint pertains to second ingredient.
I. CONTENTIONS IN RELATION TO NON-FULFILMENT OF SECOND INGREDIENT
13.As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debt. In the present case, the accused admitted his signature upon the cheque in question. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
14.The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise pg. 7 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016 the presumptions, once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
15.In case of Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, the Hon'ble Supreme Court had held:
"The accused under Section 138 NI Act has two options. He can either show that the consideration and debt did not exit or that under the particular circumstances of the case, the non- existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as it is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which his probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the pg. 8 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016 consideration and debt did not exist or their non-existence was so probably that a prudent man under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question, was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon the circumstantial evidence and if the circumstances so relied upon are so compelling, the burden may likewise shift again on the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arises under Section 118 and 139 of NI Act''.
16.So far as the facts of liability is concerned, in view of mandatory presumption of law as discussed above, if any cheque has been produced by the complainant bearing the signatures of the accused, there cannot be any inherent lacuna in the existence of the liability. But then definitely, accused can point loop holes in the story of the complainant by impeaching the credit of the witness during his cross- examination. The accused can discharge his burden by demonstrating the preponderance of probabilities coming in its way. In the present case, the defences raised by the accused to rebut the presumptions are discussed below:
a. Contention 1: GOODS SUPPLIED WERE OF
SUBSTANDARD QUALITY
17.It is contended by the Ld. counsel for the accused that the goods that were supplied by the complainant were of substandard quality and due to that reason, accused has suffered loss. It is further contended that despite giving information to the complainant, no attempts were pg. 9 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016 made by the complainant to replace the substandard goods. He further contended that the complainant has supplied the goods without first examining its quality.
18.Per contra, Ld. Counsel for the complainant argued that the goods were delivered to the accused after examining the quality check of the goods. He further argued that no intimation was sent by the accused to the complainant qua the alleged defective goods. He further argued that no complaint from any customers were placed on record by the accused to prove the sub-standard qualities of goods. He further argued that the complainant had supplied only the laminate sheets to the accused and it was put into use by the accused himself.
19.In the present case, the business transaction between both the parties is undisputed. It is further not in dispute that the goods were supplied to the accused and that a post-dated cheque (cheque in question) was given to the complainant by the accused. It is further undisputed that there was only one business transaction between the parties. The only contention is that the goods were of sub-standard quality. It was admitted by the accused that the goods i.e laminate sheets were put into use by them by making shampoo sachets of the same. Thus, accused used the goods supplied to him and further changed its nature so that it cannot be again converted to its original state. This implies that goods were not only accepted by the accused but also used by him for further purpose. So far as the sub-standard quality of goods is concerned, this court finds itself in consonance with the contentions of the complainant. Accused has not placed any document to prove that the goods were of sub-standard quality. Accused further failed to prove that any complaint was made to him by any of the customers qua leakage in the sachets. It is the duty of the purchaser to give pg. 10 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016 notice qua inferior quality of goods, if any, to the seller within a reasonable time but, in the present case, no such intimation was given by the accused to the complainant. Mere assertion on the part of the accused that the goods were defective and that intimation was given to the complainant is not per se sufficient to raise a probable defence. Thus, this contention of the accused that the goods were of inferior quality is not tenable.
b. Contention 2: DISCREPANCY IN BILL AMOUNT AND CHEQUE AMOUNT
20. It is contended by the Ld. Counsel for the accused that the complainant has not came with clean hands before the court. He further contended that as per the complainant, the total billed amount vide CW-1/3 was Rs. 2,13,890/- and the cheque amount was only Rs. 1,87,680/- and no claim was filed by the complainant qua remaining amount from the accused and thus argued that complainant had not explained the reason why he had accepted a cheque of a lower amount than the actual bill.
21.Per contra, Ld. Counsel for the complainant argued that the post-dated cheque was given by the accused along with the purchase order vide Ex. DW1/XA (copy of purchase order dated 05.05.2009, brought on record during cross-examination of the DW-1). Thus, when the cheque got dishonoured, the present case was filed. He further contended that no person can be forced to take an action as per law against any other person and thus argued that it is upon the complainant to prosecute and in case, he does not exercise his right, no adverse inference can be drawn against the complainant.
pg. 11 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016
22.In the present case, the material/goods that were supplied to the accused were not in dispute. Neither the documents vide Ex. CW1/3 challenged by the accused. Further, as proved above, the cheque in question was also dishonoured and the present complaint pertains to the said dishonour cheque. The present case involves a commercial transaction and initiating any legal action is the sole discretion of the complainant and if that right was not exercised by him, solely for this purpose, no adverse inference can be drawn against him. Consequently, this contention of the accused that for the remaining amount no legal action was taken by the complainant against the accused does not hold water and liable to be rejected.
23.Therefore, as far as the second ingredient is concerned, in view of the above discussion, the accused has not been able to rebut the presumption, since he has failed to raise any probable defence.
CONCLUSION
24.To recapitulate the above discussion, the complainant has been successful in establishing his case beyond reasonable doubt that the accused had issued the cheque in question in discharge of its legally enforceable liability. The presumptions under Section 118 and Section 139 of NI Act were drawn against the accused. The accused has miserably failed to rebut the said presumption by raising a probable defence. The defence of the accused that there was no legal liability is not proved, even on the standard of preponderance of probabilities.
25.In light of the aforementioned discussion, the complainant has successfully proved all the essential ingredients of section 138 of the NI act. Accordingly, the accused Vinay Kapoor is held liable for pg. 12 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016 committing the offence under section 138 of the Negotiable Instrument act, 1881 and hereby convicted.
26.Let the convict be separately heard for the quantum of sentence.
27.Let a copy of this judgment be given to the convict free of cost.
ANNOUNCED IN THE OPEN (VIKAS MADAAN)
COURT TODAY 26th of May, 2022 METROPOLITAN MAGISTRATE
ROHINI DISTRICT COURTS
DELHI
(Note:- This Judgement contains thirteen pages which is signed by me. ) (VIKAS MADAAN) METROPOLITAN MAGISTRATE ROHINI DISTRICT COURTS DELHI pg. 13 M/s Kanodia Technoplast (P) Ltd. V. Vinay Kapoor CC No. 10446-2016