Delhi District Court
M/S Umc Mills Pvt. Ltd vs M/S Bhola Jeee Soap Grah Udyog on 26 October, 2024
IN THE COURT OF JUDICIAL MAGISTRATE (NI
ACT), NORTH-WEST, ROHINI, DELHI
Presided by :- Ms. Shivangi Vyas
CNR No. DLNW02-019060-2017
CC No. 11786/2017
M/s UMC Mills Pvt. Ltd.
Through its Managing Director
Sh. Uttam Paul
R/o A-82/2, Gali No. 3,
Swaroop Nagar,
Delhi ..... Complainant
Versus
Sh. Ram Kumar Singh
Proprietor of
M/s Bhola Jee Soap Grah Udyog
R/o Devi Nagla Quarsi,
Bye-Pass, Aligarh-202001,
Uttar Pradesh .... Accused
JUDGMENT
(1) Offence complained of : Section 138 N.I. Act (2) Plea of accused : Pleaded not guilty (3) Date of institution of case : 12.09.2017 (4) Date of reserve of order : 09.09.2024 (5) Date of Final Order : 25.09.2024 (6) Final Order : Convicted BRIEF STATEMENT OF REASONS FOR THE DECISION CC No. 11786/2017 Page No. 1 of 12 Digitally signed Shivangi by Shivangi Vyas Vyas Date: 2024.10.26 15:42:34 +0530
1. Vide this judgment, this court shall dispose of complaint under section 138 of Negotiable Instruments Act (hereinafter referred to as 'NI Act') filed by Sh. Uttam Paul on behalf of M/s UMC Mills Pvt. Ltd. (hereinafter referred to as 'complainant') against Sh. Ram Kumar Singh proprietor of M/s Bhola Jee Soap Grah Udyog (hereinafter referred to as 'accused') for dishonour of cheque bearing number 267731 dated 31.07.2017 for a sum of Rs. 2,52,252/- drawn on Punjab National Nank (herein after referred to as cheque in question).
FACTUAL MATRIX
2. Facts in brief as stated in the complaint is the Managing Director of M/s UMC Mills Pvt. Ltd. which delas in High class detergent Powder, Soap, Cake and other general items and also supplied chemicals used in these products. Accused runs business in name of Bhola Jee Soap Grah Udyog and used to purchase chemicals from complainant. It is stated that on 08.06.2017, accused purchased Acid(LABSA) weighing 1610 kg for Rs 142,002/- against book no. 021, serial number 1045 and SS Powder for Rs. 1,10,250/- against book number 021 serial number 1044 and against the said liability issued the cheque in question in favour of complainant with the assurance that the same would be honored upon presentation.
3. It is stated that as instruction of accused, complainant presented the said cheque and the same was returned with CC No. 11786/2017 Page No. 2 of 12 Digitally signed Shivangi by Shivangi Vyas Vyas Date: 2024.10.26 15:42:44 +0530 the remarks 'Funds Insufficient' vide return memo dated 02.08.2017. Thereafter, complainant sent a legal notice dated 18.08.2017 through its counsel through speed post calling upon accused to make payment of cheque amount. Accused failed to make any payment and therefore the present complaint was filed.
4. Complainant tendered his pre-summoning evidence on 15.01.2018 by way of affidavit EX CW1/A and relied upon following documents in his evidence :
Ex CW1/1 : Original Cheque in question. Ex CW1/2 : Bank Return memo dated 02.08.2017 Ex CW1/3 : Legal notice dated 18.08.2017 Ex CW1/4 : Speed post receipt Ex. CW1/5 : Tracking Report Ex. CW1/6 : Invoices of serial number 1045 book number 021 and serial number 1044 book number 021 Ex. CW1/7 : Certified true copy of board resolution APPEARANCE OF ACCUSED AND PROCEEDINGS
5. Since prima facie offence under section 138 of Negotiable Instrument Act was made out, the accused was summoned vide order dated 15.01.2018 Accused entered his appearance and notice was served upon him for offence punishable u/s 138 NI Act on 27.05.2019, to which he pleaded not guilty and claimed trial.
CC No. 11786/2017 Page No. 3 of 12 Digitally signed by Shivangi Shivangi Vyas Vyas Date: 2024.10.26 15:42:52 +0530
6. In his plea of defense, accused has submitted that he has given the cheque in question to the complainant company as guarantee for supplying of some sample of material. He stated that cheque in question bears his signature however the contents in the same were not filled by him. He stated that complainant did not supply him any sample and he does not have any liability towards the complainant. He stated that legal notice regarding cheque was not received by him and the same bears his correct address.
COMPLAINANT EVIDENCE
7. An application under section 145(2) NI Act was moved by the accused seeking permission to cross-examine the complainant and the same was allowed by Ld. Predecessor of this court vide order dated 24.09.2019. The complainant adopted his pre summoning evidence and placed reliance upon the documents EX CW1/1 to Ex CW1/6. Complainant was cross-examined by Ld. counsel for accused and was discharged. No other witness was examined on behalf of complainant and complainant evidence was closed vide order dated 24.12.2021 STATEMENT OF ACCUSED AND DEFENCE EVIDENCE
8. All the incriminating evidence was put to the accused and his statement under section 281 CrPC read with section CC No. 11786/2017 Page No. 4 of 12 Digitally signed Shivangi by Shivangi Vyas Date:
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313 CrPC was recorded on 02.11.2022. In his plea of defence, accused submitted that he never purchased any goods from complainant. He stated that cheque in question was given as security on the assurance that in case any goods would be required by me the payment would be done through security cheque but he never purchased any goods from complainant. He stated that he did not receive any legal notice regarding cheque. The cheque in question was given as a blank signed cheque and was only given as security without any liability.
9. Accused chose to lead DE and examined himself as DW1. DW1 deposed that.......... DW1 was cross examined by Ld. Counsel for complainant and discharged. No other witness was examined in defense and defence evidence was closed vide order dated 24.06.2024 FINAL ARGUMENTS
11. It is argued on behalf of complainant that complainant has been successful in establishing all the necessary ingredients of offence under section 138 NI Act. It is argued that accused purchased material from complainant as per the invoices placed ion record and gave the cheque for payment of material purchased by him. Accused has taken the defence that no material was purchased by him but failed to prove the same during trial. It is argued that the statutory presumption of existence of legal liability lies in favor of complainant and the accused CC No. 11786/2017 Page No. 5 of 12 Digitally signed Shivangi by Shivangi Vyas Vyas Date: 2024.10.26 15:43:08 +0530 has failed to rebut the same.
12. Per Contra, Ld. Counsel for accused has argued that no offence under section 138 NI act is made out against the accused. Ld. Counsel for accused has pointed out that complainant has relied on certain bills wherein CST has been charged instead of VAT even when the goods were handed over allegedly to accused in Delhi which shows that bills were false and fabricated. It is argued that the complainant could not have anticipated the dishonour of cheque and initiation of legal proceedings even before presentation of cheque but the board resolution was already passed in favor of AR to initiate proceedings against accused. It is argued that complainant has failed to produce any material to show the delivery of goods to accused. No receiving was admittedly taken by complainant. It is argued that accused does not have any liability towards the complainant and is not even the proprietor of firm to whom material was allegedly supplied.
LEGAL PROVISION
13. Before adverting to scanning the evidence under the lens of the law pertaining to the lis at hand, let us revisit the legal benchmark to be satisfied as enunciated in Section 138 of the Act.
Dishonour 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 CC No. 11786/2017 Page No. 6 of 12 Digitally signed Shivangi by Shivangi Vyas Date:
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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 term which may extend 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 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.
ANALYSIS
14. The essential ingredients that can be culled out from the statutory provision are:
i) Person must have drawn a cheque on an account maintained by him in a bank for CC No. 11786/2017 Page No. 7 of 12 Digitally signed Shivangi by Shivangi Vyas Vyas Date: 2024.10.26 15:43:22 +0530 payment of a certain amount of money to another person from out of that account;
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 30 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 of the said notice.
15. Being cumulative, it goes without saying that it is only when all the aforementioned ingredients are satisfied, the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.
16. Averting to the facts of the present case, the cheque in question was admittedly signed by accused as he has admitted his signature on the cheque in question. The CC No. 11786/2017 Page No. 8 of 12 Digitally signed Shivangi by Shivangi Vyas Date:
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presentation and dishonour of cheque is depicted by cheque return memo Ex CW1/2 which shows the reason for dishonor as 'Funds Insufficient'. The complainant has deposed that cheque was returned dishonoured due to the said reason and the accused has also not disputed the dishonor of cheque for the above reason or the cheque return memo.
17. The defence of accused is that he did not have any legal liability to pay the cheque amount to complainant. Ld. Counsel for accused has argued that accused does not have any liability as he is not the proprietor of firm M/s Bhola Jee Soap Grah Udhog. Accused has deposed as DW1 and stated that the firm is in the name of his father and his father is the proprietor of said firm. He stated that he used to take care of business along with his father and that they were running a business of soap and soap products. . During cross examination, accused admitted that he did not file any document regarding the proprietorship of firm on record. He admitted that orders for raw material was placed by him to the complainant. The accused worked alongwith his father in the said shop and had placed order with complainant. Even if it is presumed that he is not the proprietor of the firm, the same is of o consequence as the cheque in question was admittedly given by him from his personal account and not from the account of firm. It is of no consequence whether the cheque was given to discharge his own liability or the liability of his father who is stated to CC No. 11786/2017 Page No. 9 of 12 Digitally signed Shivangi by Shivangi Vyas Vyas Date: 2024.10.26 15:43:36 +0530 be proprietor of firm. Even if cheque is issued to discharge the liability of his father, the accused is responsible for dishonor of said cheque.
18. Ld. Counsel for accused has further argued that invoices placed on record Ex CW1/6 are false and fabricated as the same does not contain any receiving of accused and also contain the charge of CST instead of VAT on the total sale value. The EX CW1/6 are carbon copies of two bills of serial no 1044 and 1055 of book 021 for amount of Rs. 142002/- and Rs. 110250/- respectively. Both the bill amount includes addition of 5% CST on total sale value. Whether or not the tax was correctly computed is immaterial in the present case as the validity of bills are not in question in the present case. Both the bills are prima facie reflective of the liability of accused to pay for the raw material purchased from the complainant. The complainant CW1 in his cross examination has stated that he has paid the CST of the alleged bill before concerned department. Whether the same wad done rightly is not is not the fact in issue in the present complaint. Further the complainant has not taken any receiving from accused regarding the delivery of goods. From the testimony of complainant it is clear that the material was supplied simultaneously to accused on the same day when invoiced were raised and cheque was prepared accordingly by accused. Since the entire transaction occurred on the same day simultaneously, the complainant supplied the material as per invoices and CC No. 11786/2017 Page No. 10 of 12 Digitally signed Shivangi by Shivangi Vyas Vyas Date: 2024.10.26 15:43:43 +0530 accepted the payment in cheque there was no need of any separate receiving from accused.
20. Ld. Counsel for accused has further argued that no statement of account was filed by complainant. The complainant has already filed the invoices for which the payment was due to be made by accused. It is not the case of accused that some part payment has been made to the complainant, so there is no need of filing of statement of account of complainant to ascertain the liability of accused. the liability of accused is reflected from the invoices Ex CW1/6 already placed on record.
21. Ld. Counsel for accused has further argued that board resolution Ex CW1/7 regarding meeting held on 31.07.2017 and appointing Uttam Pal director of complainant company was already held even before presentation of cheque which is also dated 31.07.2017. The complainant has deposed that the invoices were raised, material supplied and cheque was handed over on the same day of raising of bill i.e., 08.06.2017. The cheque is dated 31.06.2017. It appears that out of abundant caution and to tackle any exigency the board meeting was held and Sh. Uttam Pal was appointed as Authorised Representative of company to deal with matter in case of non-receipt of payment by dishonour of cheque. The same does not in any manner invalidate or raise question regarding the authority of Sh. Uttam pal to institute complaint against accused.
CC No. 11786/2017 Page No. 11 of 12 Digitally signedShivangi by Shivangi Vyas Date:
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19. Considering the above discussion it can be concluded that accused has failed to raise the probable defence of non existence of legal liability towards complainant.
20. Accused has further raised the defence of not receiving the legal demand notice. Accused has admitted his address upon the notice to be his correct address. When the address is admitted by accused, it is presumed that when the notice was sent through post, the same was delivered to the accused and received by him/. The delivery of notice through post is evident from postal receipt and tracking report Ex CW1/4 and Ex CW1/5. The accused admittedly did not make any payment even after receipt of legal demand notice.
CONCLUSION
22. From the above discussion, it can be concluded that the complainant has successfully established the necessary ingredient of existence of legal liability for offence under section 138 NI Act. Consequently, this court finds the accused Ram Kumar Singh guilty of offence under section 138, Negotiable Instruments Act, 1881 and convicts him accordingly.
Announced in open court on 26.10.2024 Shivangi Digitally signed
by Shivangi Vyas
Vyas Date: 2024.10.26
15:43:58 +0530
(Shivangi Vyas)
JMFC (NI Act), North West
Rohini, Delhi
CC No. 11786/2017 Page No. 12 of 12