Delhi District Court
Gupta Biotech (P) Ltd vs . on 22 August, 2020
_______________________________________________________ IN THE COURT OF Sh. MAYANK GOEL, LD. METROPOLITAN MAGISTRATE-03, NORTH DISTRICT , ROHINI COURTS, DELHI _______________________________________________________ CIS No. 4297/2017 PS Model Town U/s. 138 Negotiable Instrument Act Gupta Biotech (P) Ltd C1/2D/4, Model Town, Delhi110009 .................. COMPLAINANT Vs. 1. Arsh Agro Chemicals Through its Proprioter Sh. Satnam Singh C62, Near Almamater School, PBT Road, Kurumanchal Nagar Bareily, UP243122 2. Sh. Satnam Singh Propriotor Arch Agro Chemicals C62, Near Almamater School, PBT Road, Kurumanchal Nagar, Bareily, UP243122 ...................... ACCUSED JUDGMENT
1) Name of the complainant : Gupta Biotech (P) Ltd
2) Name of the accused : 1.Arsh Agro Chemicals
2.Satnam Singh
3) Offence complained of : Section138 Negotiable __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 Instrument Act
4) Plea of accused : Pleaded not guilty
5) Date of institution of the case : 08.09.2017
6)Final order : Convicted
7) Date of reserving of judgment: 10.08.2020
8) Date of final order : 22.08.2020 BRIEF REASONS FOR THE DECISION OF THE CASE:
1) Present is a complaint for offence under section 138 of the Negotiable Instrument Act (hereinafter referred to as the 'Act') with averments that accused no.1 is the proprietorship firm of accused no.2. That the complainant is a duly registered and incorporated company under the companies Act. That the accused no.1 through accused no.2 purchased Agro chemicals from the complainant and as per the statement of account of accused no.1 Rs. 6,78,252/ was outstanding payable towards the complainant company as on 23.03.2017. That the accused no.2 was also working as commission agent with the complainant. That accused no.2 is having outstanding amount payable to the complainant of Rs.5,21,748/ towards excess amount payable by the complainant to the accused no.2 in his commission account. That on 23.03.2017, accused no.2 settled his account with the complainant as a proprietor of accused no.1 and of commission agent account for an amount of Rs.12 Lacs. That the separate confirmation was also given by the accused no.2 on very same date i.e. __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 23.03.2017 and assured to make the said payment in installments. That later on the accused issued a cheque no.346703 dated 02.07.2017 amounting to Rs.11,82,925/ drawn on Punjab National Bank, Rajender Nagar, Bareily, UP to the complainant with assurance that same shall be honoured on presentation. However, the said cheque got dishonoured with remarks "Insufficient Funds", when complainant presented the same to his banker and accused failed to pay the cheque amount within the stipulated period of time despite service of legal notice to him. The complainant, thereafter, filed the present complaint wherein accused was summoned and notice of accusation for offence u/s 138 NI Act was served upon him to which he pleaded not guilty and claimed trial.
2) In evidence, complainant himself examined as CW1, who filed his affidavit in his evidence, which is Ex.CW1 and relied upon the documents i.e, Certificate of incorporation Ex. CW1/1, Board Resolution Ex.CW1/2, account ledger Ex.CW1/3, confirmation given by accused no.2 Ex.CW1/4, ledger account in the name of accused no.1 firm is Ex.CW1/5, Ledger account in the name of accused no.2 is Ex.CW1/6, ledger account maintained by accused with Indo Crop Solutions is Ex.CW1/7, original Cheque in question Ex.CW1/8, Dishonour/Returning memo Ex.CW1/9, legal notice Ex. CW1/10, Postal receipt Ex. CW1/11, Tracking report Ex. CW1/12.
3) In his cross examination, complainant (CW1) stated that the accused was only a commission agent in his company from the year 20142015 till __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 year 2017 and was never employed as employee in his company. That whenever the products were given to the accused, the company always raised invoices. That his company had transferred the amount as mentioned at point A,B & C in Ex.CW1/7 to the accused, as accused has engaged sales officials and the accused could not pay the salary to them and his company received some complaints from such employees that is why the complainant has transferred the said amount in the account of accused which were further adjusted in the commission account of the accused.
4) After complainant evidence, statement of accused was recorded u/s. 313 Code of Criminal Procedure on 10.02.2020, wherein the stand of accused was that he was Regional Sales Manager of the complainant from 2014 till July 2017. That the accused no.1 used to purchased goods from the complainant and he had never worked as commission agent to the complainant. He admitted the fact that complainant has maintained two separate ledger account, one in the name of accused no.1 and another in his name. He also admitted the facts that accused no.1 has to pay Rs.6,78,252/ to the complainant. For Ex.CW1/4 i.e the confirmation given by accused to the complainant regarding outstanding liability of the accused towards the complainant and Ex.CW1/8 i.e original cheque in question, it is stated by accused that both have been forcibly taken from him. He admitted the receipt of legal notice dated 25.07.2017 sent by the complainant to him. He further averred that he is innocent person and accused no.1 has to pay Rs.6,78,252/ to the complainant and he has to take around Rs. 22 Lakhs in salary account from the complainant. The present case is false and nothing __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 is due against me in the account of the complainant.
5) In defence evidence, accused examined three witness including himself.
(i) DW1 Ashok Kumar Gupta deposed that he was doing the business of Agro chemicals. He know that the accused Satnam Singh was working with Indo Gulf Sciences Ltd. HQ. at Bareilly in marketing Division and he was working as a marketing head/director. He has introduced Satnam Singh as marketing candidate in the complainant company on services basis. Complainant company select the Satnam Singh as the regional sales manager on headquarter bareily for eastern and western UP. Salary/other benefits was decided by the complainant in his presence i.e Rs. 6 Lacs per annum as a salary plus 4 wheeler vehicle with driver plus other expenses. All these things were orally decided before him at the complainant residential address and he do not know what all documents were executed between the parties to the present case after that. He do not even know if any such conditions of appointment was changed later on after he left the complainant's residential house. He do not have any knowledge about the facts of the present case and he also do not have any concern with the present case.
(ii) DW2 Sh. Bhupender deposed that the accused is personally known to him as he had worked under him in the company and the accused was his reporting boss. He was with the company alongwith the accused in the year 20162017. Accused was working as Regional sales Manager. He further deposed that he do not know the salary of the accused however he received __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 salary from the company. They also received their salary from the complainant company as well as Indo Crop Solution in his bank account. Complainant company took a blank cheque at the time of joining the service as a security. Accused Satnam Singh never given to him the salary and company never send his salary in the account of Satnam Singh. He is aware about the present case which the complainant company has filed the case against the accused. He has not received the security cheque from the company till date and even did not settle his outstanding Salary.
(iii) DW3 Sh. Satnam Singh deposed that he was the accused in the present case and he is the proprietor of accused no. 1/firm. His proprietor firm having business transaction with the complainant company and a sum of Rs. 6,78,252/ is due and payable towards the complainant company in relation to the business transaction with my proprietor firm. He was also working as a Regional Sales Manager with the complainant company and amount of Rs.22 Lakh is pending towards his salary and expenses which company is liable to pay.
6) I have heard the arguments advanced by the Ld. counsel for complainant as well as for accused. I have also carefully perused the record.
7) It is well settled position that to constitute an offence under S. 138 N.I. 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 __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 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;
8) Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 have committed an offence under Section 138 of the Act.
9) In M/s. Kumar Exports v. M/s. Sharma Carpets, 2009 A.I.R. (SC) 1518, The Hon'ble Supreme Court observed in para 11 as under: Para 11. "The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume"
as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as 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 nonexistence 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 is probable has to be brought on record for getting the burden of proof shifted to the __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 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 consideration and debt did not exist or their nonexistence was so probable that a prudent man would 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 circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to 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 arising under Sections 118 and 139 of the Act. The accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue".
10) Coming back to the facts of the present case, it is the case of the complainant that accused had issued the cheque in question in discharge of his liability for an amount of Rs.11,82,295/. The statement of account Ex. CW1/5 mentioned the amount of Rs.6,78,252/ and Ex.CW1/6 mentioned the amount of Rs.5,22,448/ is payable by the accused to the complainant. The defence taken by the accused in his application u/s 145(2) NI Act are as __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 under:
(i) That the complainant has made a false and frivolous claim and the accused was the employee of the complainant company and he has outstanding amount payable by the complainant company.
No documentary evidence has been filed by the accused to prove that he was employed by the complainant company as Regional Sales Manager at any point of time from 2014 till 2017 as alleged by the accused no.2. During his crossexamination, the accused i.e DW3 admitted the fact that complainant company never issued any appointment/joining letter/offer letter for the post of Regional Sales Manager(RSM). He further deposed that he could not produce any document or salary slip to prove that he was working as RSM with the complainant company and the complainant company was paying him salary for the post of RSM. He further deposed that he could not produce any document to prove that complainant company ever gave him any letter or communication which shows that company had appointed him as RSM. He also admitted the fact that he had not made any complaint with regard to the outstanding liability of Rs. 22 Lacs payable by the complainant company, as alleged by him. Moreover, DW1 also deposed in his examination in chief that he do not know what all documents were executed between the parties to the present case pertaining to the appointment of the accused no.2 with the complainant company. DW2 also deposed that he did not have any knowledge about the facts of the present case. Therefore, the accused no. 2 failed to prove that he was employed with the complainant company as RSM at any point of time and also failed to prove that he has any outstanding liability payable by the complainant __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 company.
(ii) That the complainant company called the accused in his office for settlement to pay the outstanding amount after settlement and when the accused visited the office of the complainant company, the Directors of the complainant company threatened and forcibly obtained the cheque in question and signature on few blank papers.
The accused failed to prove any outstanding liability towards the complainant company. Though he deposed in his crossexamination that he admitted that he had never sent any notice to the company demanding his alleged dues but he had sent mail to the company in reference of demanding his outstanding payment. Again he deposed that he could not show or produced any such mail content that he had ever demanded alleged outstanding amount from the complainant company. No police complaint had been filed by the accused against the Directors of the complainant company pertaining to the threat and forcible act done by the Directors of the company in taking the cheque in question and signature on blank papers. Therefore, accused failed to prove that any illegal act of threatening or forcibly taking of cheque in question and signature on blank papers was done by the Directors of the complainant company.
11) The accused admitted that he has received legal notice Ex.CW1/11. He also admitted the cheque in question Ex.CW1/A was issued by him to the complainant company but alleged that the same was taken forcibly, which he failed to prove. He also admitted the liability of accused no.1 company for an amount of Rs. 6,78,252/ which was payable by him being __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 the proprietor of accused no.1 firm. He also admitted that Ex.CW1/4 is having his signatures in which he himself admitted liability of Rs.12 lakhs payable by him to the complainant.
12) Ld. Counsel for complainant has relied upon several judgments passed by Hon'ble Apex Court.
In K.N.Beena Vs. Muniyappan & Anr, 2001(4) RCR Criminal 545:(2001) 8SCC 458, it was held that in view of the provision of Section 139 of NI Act read with section 118 thereof, the Court had to presume that the cheque had been issued for discharging a debt or liability. The said presumption was rebuttable and could be rebutted by the accused by proving the contrary. But mere denial by the accused was not enough. The accused had to prove by cogent evidence that there was no debt or liability.
In APS Forex Services Pvt.Ltd Vs Shakti International Fashion Linkers and Ors it was held that the presumption under section 139 of NI Act is rebuttable in nature. However to rebutt the presumption the accused was required to lead the evidence. Section 139 of the Act is an example of reverse onus clause and therefore, once the issuance of the cheque had been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the accused to rebutt such presumption by leading evidence.
13) That the evidence led by the accused in the present case is not __________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13 supporting the evidence of the accused. Neither the accused nor the other defence witnesses succeed in rebutting the presumption raised u/s 139 of NI Act. None of the defence witness dispute or contradict the contents and transactions shown in Ex.CW1/3, Ex.CW1/5, CW1/6 and Ex.CW1/7.
14) Having regard to the material available on record, complainant has succeed to establish his case under Section 138 of the Act as required by law and, therefore, accused is convicted for the offence u/s. 138 of Negotiable Instrument Act.
15) Let the accused/convict be heard on the quantum of sentence.
16) Let the copy of this judgment be given free of cost to the convict.
MAYANK Digitally signed by
MAYANK GOEL
GOEL Date: 2020.08.24
13:09:30 +0530
Announced in open court (MAYANK GOEL)
on 22.08.2020 MM03/North District
Rohini Courts/Delhi,
__________________________________________________________________ M/s Gupta Biotech (P) Ltd vs. Arsh Agro Chemicals CIS No. 4297/2017 PS Model Town 13 of 13