Delhi District Court
R.K. Rajpal vs . B.K. Sehgal on 20 April, 2015
IN THE COURT OF SH. ASHOK KUMAR, METROPOLITAN
MAGISTRATE (SOUTH EAST)07, NEW DELHI
CC No. : 51/2/14
U/s : 138 NI Act
R.K. Rajpal Vs. B.K. Sehgal
JUDGMENT
a The Sl. No. of the case : 51/2/14
b The date of dishonor of cheque : 03.03.2007 and 10.03.2007
( Insufficient Funds)
c The date of Institution of the case : 05.05.2007
d The name of complainant : R.K. Rajpal
Proprietor of M/s Karan Trading
Company, Office At41E,
Connaught Place, New
Delhi110001.
e The name of accused : B.K. Sehgal (Partner)
M/s Sehgal and Sons,
A1, Ramesh Nagar, Main
Najafgarh Road, New
Delhi110015.
f The offence complained of :138 NI Act
g The plea of accused : Pleaded not guilty
h Arguments heard on : 08.04.2015
i The final order : Convicted.
j The date of judgment : 20.04.2015
BRIEF STATEMENT OF REASONS FOR DECISION (Metropolitan Magistrates Judgment U/s 355 Cr.P.C):
1 Facts of the case:
It is the case of the complainant that accused No. 1 issued cheques bearing CC No. 51/2/14 1 of 14 No. 600250 for Rs. 38077/ dated 1.3.2007 and cheque No. 600251 for Rs. 36947/ dated 7.3.2007 both drawn on Bank of India, Kirti Nagar Branch in discharge of the liability on account of business transaction with the complainant on behalf of the firm. The above cheques were dishonored with the remarks( Funds Insufficient) vide return memo dated 03.03.2007 and 10.03.2007. Legal notice dated 21.03.2007 for making the payment of aforesaid cheques was duly served upon the accused. On these facts complainant has filed present complaint and predecessor court issued summoning orders on 26.03.2007.
Thereafter, notice was framed against the accused on 03.09.2013. As per the procedure laid down in Rajesh Agarwal Vs. State (Judgment of Delhi High Court) defence plea was recorded. Thereafter, application U/s 145(2) N.I Act was allowed and on 17.12.2013 the presummoning evidence was adopted by the complainant in post summoning evidence also and he was cross examined and CE was closed. On 14.07.2014 accused was examined U/s 313 Cr.P.C wherein he pleaded innocence. He states in his defence that he is not liable to pay the amount of the two cheques in question in the present case because as per his business dealings, he used to give the security cheques in advance and the complainant used to supply the goods later on. In the present case the complainant did not supply the goods and hence, he is not liable to honour the cheques. He has been falsely implicated in this case and pleads innocence. The accused has not led any defence evidence.
Complainant proved the following documents in his presummoning evidence : CC No. 51/2/14 2 of 14 i Cheques with bank endorsement Ex. CW1/A (Colly).
ii Bank returning memos Ex. CW1/B (Colly).
ii Legal notice dated 21.03.2007 Ex. CW1/C.
iv Registered AD, UPC and envelope Ex. CW/D and CW1/F.
4 RELEVANT LAW
138. Dishonour of of cheque for insufficiency, etc. of funds in the account Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for [ a terms which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both :
Provided that nothing contained in this section shall apply unless
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of CC No. 51/2/14 3 of 14 information by him from the bank regarding the return of the cheque as unpaid' and.
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation - For the purposes of this section, " debt or other liability" means a legally enforceable debt or other liability.
139. Presumption in favour of holder It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, of any debt or other liability.
Sec. 43 of NI Act interalia provides that a negotiable instrument drawn, accepted, etc. without consideration or for a consideration which fails creates no obligation of payment between the parties to the transaction.
The ingredients to prove the commission of offence under Sec. 138 NI Act have been laid down in Jugesh Sehgal Vs. Shamsher Singh Gogi 2009 (9) SCALE 455. The relevant portion of the said judgment reads as under:
"9. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
CC No. 51/2/14 4 of 14
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt ofar the said notice"
On burden of proof in cases under NI Act From reading of below quoted paragraphs No. 4 to 9 and 20 of Hon'ble Supreme Court in Vijay Vs Laxman 2013 (1) RCR Cr 1028, the following legal ratio emerges with regard to burden of proof in matters under NI Act.
i. The prosecution has to prove beyond reasonable doubt that cheque was CC No. 51/2/14 5 of 14 issued by the accused duly signed by him but this burden is lightened by presumption under Sec. 118 and 139 NI Act. Hence, the complainant has only to make an averment that cheque was issued by accused to complainant for lawful consideration.
ii. Thereafter, the burden shifts on the accused to show that the cheque was not issued in lieu of legally enforceable debt or liability but was issued by way of security or any other reason on account of some business transaction or was obtained unlawfully.
iii. However, accused can rebut this presumption or discharge his burden by showing a probable defence or preponderance of probability raising genuine doubt that no legally enforceable debt or liability exists.
iv. Accused can discharge this burden either from circumstances appearing in the case or the evidence adduced by the complainant or accused in his defence.
v. On reading of definition of word proved or disproved in Sec. 3 of Evidence Act with Sec. 139 NI Act court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the nonexistence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist.
Above said law is quoted in paragraphs No. 4 to 9 and 20 of Hon'ble Supreme Court in Vijay Vs Laxman and another 2013 (1) RCR Cr 1028.
Above said observations were also made by Hon'ble Supreme Court in CC No. 51/2/14 6 of 14 Kamala S Vs Vidhyadharan MJ 2007 (3) RCR (Cr) 865 and M/s. Kumar Exports Vs M/s Sharma Carpets 2008 (16) SCALE 372 Paras 9 to 12.
On service of legal notice in cases under NI Act In this respect it has been provided in the case titled as C.C. Alavi Haji Vs Palapetty Muhammed and Anothers (2007) 6 SCC 555 that the entire purpose of service of legal notice to the accused under Sec. 138 NI Act is to give an opportunity to the drawer to pay the cheque amount within 15 days of the service of legal notice and thereby free himself from the penal consequences. It conceives cases where a wellintentioned drawer may not have made necessary arrangements for reasons beyond his control to honour the cheque drawn by him and hence this opportunity has been provided. Hence, this provision is meant to protect honest drawers whose cheque may have been dishonoured for the fault of others or who may have genuinely wanted to fulfill their promise but on account of inadvertence or negligence failed to make necessary arrangements for the payment of the cheque. Hence, any honest drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Sec. 138 NI Act, make payment of the cheuqe amount and submit to the court that he has made payment within 15 days of receipt of summons (by receiving a copy of the plaint with the summons) and, therefore, the complaint is liable to be rejected. Where a legal notice is sent under registered cover with proper address and stamp and sent along with the summons and complaint, then if it is contended that legal notice was not received only with a CC No. 51/2/14 7 of 14 view to cheat the complainant, and such offer of payment was not made within 15 days of receipt of summons, then such dishonest drawer can not contend improper service of the notice by virtue of applicability of presumption under Sec. 27 GC Act and 114 Evidence Act.
Hence, the accused by a preponderance of probability has to prove the following :
1 That the cheque was issued as security or for any business transaction and there is no legally enforceable debt or liability because the said security is no more enforceable or the debt or liability has been paid.
2 That the cheque was taken unlawfully and wrongfully. 3 That the debt or liability does not remain legally enforceable due to any other reason.
In the present case defence of the accused is that there is no legally enforceable debt against the cheques given by the accused to the complainant no loan was extended as per their implied contract.
5 ARGUMENTS HEARD AND DEALT WITH I have heard the submissions of both the Ld. Counsel for the complainant as well as the accused and perused the relevant record. 6 Let us now examine whether the complainant has proved the necessary ingredients of the offence under Section 138 of the Act or not. 6.1 The first ingredient of the offence stands proved as original cheques are placed on record as Ex. CW1/A (Colly) and issuance of same is admitted by the accused in his defence plea, and also through out the trial as well as his statement CC No. 51/2/14 8 of 14 u/s 313 Cr.P.C. It is settled law that a signed cheque by the account holder is a complete instrument and the rest of the portions of the cheque can be filled by the complainant. Only defence of the accused is that though he gave cheques in question to the complainant but in return goods were not supplied by the complainant. Hence it is clear that that the accused has signed the cheque in question.
6.2 The second ingredient of the offence is that the cheque must have been issued in discharge of legal liability. As the issuance of both the cheques in question are admitted, the presumptions raised under Section 139 of the Act become applicable and the issuance of cheque in discharge of the legal liability stands proved. The law on this point has been succinctly laid down by the Hon'ble Apex Court in Rangappa v. Sri Mohan AIR 2010 SC 1898.
In view of the aforesaid law, the presumption under Sec. 139 NI Act works in favour of the complainant once he files the necessary documents like the dishonored cheques, returning memo, legal notice and delivery proof and avers that the cheques were issued for legally enforceable debt or liability which the accused has failed to pay despite expiry of 15 days of the delivery of legal notice. The only defence of the accused on basis of which the accused has tried to rebut the presumption that the cheque was issued for a legal consideration or for legally recoverable debt or liability is that he issued the two cheques as an advance payment for the goods to be supplied by the complainant which ultimately were not supplied. In this regard the accused while cross examining the complainant has given the suggestion that the bill Ex. CW1/G and CW1/H are forged and fabricated CC No. 51/2/14 9 of 14 and also that the complainant cannot produce the sales tax levied on the alleged goods supplied to the complainant. In this regard the specific answers of complainant are " it is true that I have mentioned in my records that the sale tax another taxes levied on the goods supplied to the accused. It is true that I have not placed on record of taxes paid for the goods supplied. It is wrong to suggest that bills Ex. CW1/G and Ex. CW1/H are forged and fabricated and due to this reason I have not filed the same on record. It is wrong to suggest that the cheques in question were given in advance by the accused. Vol. Goods were supplied in 2004 and the cheques in question are of the year 2007 for the specific amount of the bills Ex. CW1/G and Ex. CW1/H" Hence, the complainant has not only denied the allegation of forgery as well as the non payment of sales tax but the accused has not gone deeper and has not done an incisive inquiry into this by asking questions in this regard. The accused had not only failed to file any application for referral of the said bills to FSL but has also not called any witness from sales tax department to verify the bills because the complainant has clearly stated that he has paid the sales tax leviable on the goods. The accused has further not given any defence evidence in support of his innocence. Hence, not only the presumption works in favour of the complainant but also the bills which the complainant has filed in his support regarding which the cheques have been issued by the complainant have gone unrebutted. In fact the amount mentioned in the bills is the same as the two cheques in question. Hence, I give the finding in favour of the complainant that he received the cheques from the accused for a valid consideration. Hence this ingredient stands proved.
CC No. 51/2/14 10 of 14 6.3 The third ingredient of the offence is that cheque must be presented to the
bank within a period of six months from the date mentioned on it. The cheques are Ex. CW1 (Colly) were returned back unpaid on 03.03.2007 and 10.03.2007 and the cheques are dated 01.03.2007 and 07.03.2007 . So it is evident that it was presented for payment within the statutory period of six months. Hence this ingredient stands proved.
6.4 The fourth ingredient of the offence is that the cheque(s) must be returned unpaid. The cheque were returned unpaid for the reason " Funds Insufficient. The original bank returnmemos Ex. CW1/B( colly) placed on record proves dishonour of cheques by virtue of presumption raised under Section 146 of the Act and during the trial, Ex. CW1/B (colly) went uncontroverted. Hence this ingredient stands proved.
6.5 The fifth ingredient of the offence is that the demand notice must be issued to the accused within 30 days of the intimation of dishonour of cheque and same be served upon the accused. Accused has denied the receipt of legal notice Ex. CW1/C. In view of Judgment of CC. Alavi Haji (Supra) this point can not be raised any more by the accused. If the accused had not received the legal notice, then he could have offered the payment within 15 days from the receipt of the summons in view of my aforesaid findings in the second ingredient that cheque was issued in discharge of legal liability. Hence this ingredient stands proved. 6.6 The last ingredient is that the accused must not have made the payment of the cheque amount within fifteen days of the receipt of legal notice. During the CC No. 51/2/14 11 of 14 evidence, the accused has clearly admitted that because he does not owe anything to the complainant hence he did not make the payment of cheque amount. Hence this ingredient stands proved.
DECISION
7. In view of the aforesaid the accused is convicted for the offence under Sec. 138 NI Act and he be separately heard on the point of sentence.
Announced in the open (ASHOK KUMAR)
Court on 20.04.2015 MM07, SOUTH EAST, SAKET
COURTS, NEW DELHI
CC No. 51/2/14 12 of 14
IN THE COURT OF SH. ASHOK KUMAR, MM07,
SOUTH EAST, SAKET COURTS, NEW DELHI
R.K. Rajpal Vs. B.K. Sehgal.
CC No. 51/2/14
u/s 138 NI Act.
20.04.2015
ORDER ON POINT OF SENTENCE
Present : Sh. Rajiv Chauhan, Ld. Counsel for the complainant.
Accused B. K. Sehgal with Counsel Sh. Joginder Singh.
Vide separate judgement, the accused is convicted for commission of offence under Sec. 138 NI Act for nonpayment of two cheques approximately amounting to Rs. 75000/ in total vide separate judgement of even date.
It is stated by Ld. Cousel for the complainant that the accused liable to the maximum sentence as per law because the complainant who is also a senior citizen like the accused has suffered the trial since 2007. The dishonour of the cheques has unnecessarily held up the funds for the goods.
It is stated by the convict that he is about 80 years of age and living a retired life. The convict has a family consisting of wife who is bed ridden and two sons one of whom is living abroad and the other is living separately, It is stated that accused not a previous convict, hence a lenient view may be taken against the convict while imposing the sentence and convict be not sentenced to imprisonment.
In view of the fact that the matter is pending since year 2007 and is CC No. 51/2/14 13 of 14 more than 8 years old and keeping in view the fact that the cases under Sec. 138 NI Act are unduly clogging the dockets of the courts leading to docket explosion and extraction of judicial time which could have been given to other cases and on the other hand due to the dishonest issuance of cheque, the same is eroding of credibility of such instruments, this court does not deem it necessary to extend the benefit of Probation of Offender Act to the accused. Such dishonest conduct leads not only to docket explosion which needs to be tackled with a heavy hand but also has resulted in harassment of the complainant holding up the valuable money belonging to him.
In view of the aforesaid, the convict is directed to suffer simple imprisonment of 1 year and fine of Rs. 1.5 lakhs which is approximately double the cheques amount as per law all of which is directed to be paid as compensation to the complainant and in absence of payment of the same, the convict shall suffer simple imprisonment for 9 months u/s 138 of NI Act. Copy of judgement and order on sentence be given to the convict.
Announced in the open (ASHOK KUMAR)
Court on 20.04.2015 MM07, SOUTH EAST, SAKET
COURTS, NEW DELHI
CC No. 51/2/14 14 of 14