Delhi District Court
Titled "Mmtc Ltd. vs Medchl Chemicals & Pharma (P) Ltd. 2002 ... on 2 January, 2010
1
IN THE COURT OF SH. JAGDISH KUMAR, COMMERCIAL CIVIL
JUDGE, NEW DELHI DISTRICT:NEW DELHI
ACP Marketing Pvt. Ltd.
43, Bharat Nagar, New Friends Colony,
New Delhi35
Through Mr. Vinod Kumar ................ Complainant
Versus
Mr. Ashok Sahai
Prop.: M/s. Ginni Interiors
R590, Malhotra House
Rishi Nagar, Rani Bagh
New Delhi110034 ................ Accused
(a) Complainant Case No. 926/1
(b) Date of Institution 09.04.07
(c) Date of offence On the date of dishonour of
cheque
(d) Complainant ACP Marketing Pvt. Ltd.
43, Bharat Nagar,
New Friends Colony,
New Delhi35
Through Mr. Vinod Kumar
(e) Accused Mr. Ashok Sahai
Prop.: M/s. Ginni Interiors
R590, Malhotra House
Rishi Nagar, Rani Bagh
New Delhi110034
CCJ/NDD/ND : 02.01.2010
2
(f) Offence Under Section 138 N.I.Act
(g) Plea of the accused Pleaded not guilty and claimed
trial
(h) Argument heard and 02.01.2010
reserve for order
i) Final order 02.01.2010
(j) Date of Judgment 02.01.2010
JUDGMENT
BRIEF REASONS FOR JUDGMENT: The case of the Complainant is that the complainant is a company incorporated under the Companies Act, 1956 and is carrying on the business of sale of Aluminium Composite Panels of different styles and makes, and of various sizes and specifications. Mr. Vinod Kumar is a duly constituted Attorney of the complainant and is authorized vide General Power of Attorney dated 20.04.2006 to interalia sign, institute, present and prosecute the present complaint for and on behalf of the complainant. Accused is the proprietor of M/s. Ginni Interiors and is the person incharge of and responsible for the conduct of its business, operations and functions. During the course of the business of the complainant, the accused approached the complainant and sought to purchase Aluminium Composite Panels. The accused promised to make the payment of the amount through cheque to be paid within one CCJ/NDD/ND : 02.01.2010 3 month of the delivery of the goods. Believing, it to be true and honest what the accused represented to the complainant, the complainant agreed to enter into business transactions with the accused. The accused placed various orders with the complainant for the purchase of Aluminium Composite Panels and promised to make the payment thereof through cheques. The complainant had supplied Aluminium Composite Panels of the style and specifications as demanded by the accused vide bills raised from time to time. The accused in discharge of part of his debts and liabilities towards the complainant, issued a cheque for Rs. 1,50,000/ bearing no. 096771 dated 06.02.2007 drawn on Punjab National Bank, Shakurbasti, Sainik Vihar, Delhi. The cheque was presented for encashment. The cheque returned back for reasons of "Funds Insufficient" vide returning memo dated 09.02.2007. The Complainant served legal demand notice dated 05.03.2007 to the accused through Registered AD and UPC Post and demanded the payment of the cheque amount within 15 days of receipt of the legal notice. Despite receiving the legal demand notice, Accused had failed to make the payment. The present complaint has been filed under section 138 Negotiable Instrument Act.
2. The Court has summoned the accused after taking cognizance and after supplying the documents, a notice for offence under section 138 Negotiable Instrument Act is served upon Accused on 01.06.07. Accused not pleaded guilty and claimed trial. After completion of Complainant's Post Notice Evidence, statement of the Accused is CCJ/NDD/ND : 02.01.2010 4 recorded in Memorandum to which accused has replied that the cheque in question was given to the complainant as advance amount of the material to be supplied. He further replied that a blank cheque was given to the complainant company in August - September, 2009. He also submits that the material was not supplied by the complainant nor he received the demand notice. Accused has not led any evidence in his defence.
3. I have heard Ld. Counsel for both the parties and also perused the testimony of witness and record.
4. To prove the allegation under section 138 Negotiable Instrument Act, the Complainant has to prove three ingredients: (I) There is legally enforceable liability / debt. (II) The drawer of the cheques issued the cheques to satisfy part or whole of the debt or other liability.
(III) The cheques so issued has been returned due to insufficiency of funds.
5. Before adverting to the facts of case, I would like to reproduce section 118 (a) and 139 of the Negotiable Instrument Act, which reads as: "That every negotiable instrument was made or drawn CCJ/NDD/ND : 02.01.2010 5 for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."
and section 139 reads as under: "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, or any debt or other liability."
6. As per section 118 (a) of the Act, there is presumption in favour of Complainant that the instrument i.e. cheque in dispute are issued for a consideration and further under section 139 of the Act it shall be presumed, unless the contrary is proved, the holder of the cheque received the cheque for discharge, in whole or in part,or any debt or other liability.
7. In the light of legal propositions and evidence adduced by parties, the case of the parties are as under:
8. The issuance of cheque is not disputed. The presentation of the cheque within time is also not in dispute. The returning memo Ex. CW1/3 is also not in dispute. The defence of the accused is that no material was supplied to him and no Legal demand notice was received by the accused. The ld. counsel for accused has also disputed the CCJ/NDD/ND : 02.01.2010 6 question of filing of present complaint by Vinod Kumar on behalf of the complainant company M/s. ACP Marketing (P) Ltd. I am taking firstly the question of filing of present complaint case by Vinod Kumar. The Hon'ble Supreme Court of India has settled this issue vide various judgments. It has been held by Hon'ble Supreme Court of India in case titled "MMTC Ltd. Vs MEDCHL Chemicals & Pharma (P) Ltd. 2002 (1) Civil Court Cases 13 (SC): 2001 (2) Apex Court Journal 636 (SC) as follows: "In our view the reasoning given above can not be sustained. Section 142 of the Negotiable Instruments Act provides that a complainant under section 138 can be made by the payee or the holder in due course of the said cheque. The two complaints, in question, are by the appellate company who is the payee of the two cheques.
This court has as far back as in the case of Vishwa Mitter V. O. P. Poddar (1983) 4 SCC 701, held that it is clear that anyone can set the criminal law in motion by filing a complaint of facts constituting an offence before a Magistrate entitled to take cognizance. It has been held that no court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. It has been filed that if any special statue prescribes offence and makes any special provision for taking cognizance of such offences under the statue, then the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by the Statue. In the present case, the only eligibility criteria prescribed by Section 142 is that the complaint must be by the payee or the holder in due CCJ/NDD/ND : 02.01.2010 7 course. This criteria is satisfied as the complaint is in the name and on behalf of the appellate company".
Referring to the decision in Associated Cement Co. Ltd. Keshvanand 1998 (1) Civil Court Cases 482 (SC) : 1998 (1) Apex Court Journal 238 (SC) : 1998 (1) SCC 687, this court held:
"It has further been held that no Magistrate shall insist that the particular person, whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings. It has been held that there may be occasions when different persons can represent the company. It has been held that it is open to the de jure complainant company to seek permission of the court for sending any other person to represent the company in the court. Thus, even presuming that initially there was no authority, still the company can, at any stage, rectify that defect. At a subsequent stage the company can send a person who is competent to represent the company. The complaint could thus not have been quashed on this ground."
It is the view of the court that complaint of the complainant is very much maintainable.
9. The next question raised before this court is whether accused had received the legal demand notice Ex.CW1/4. The legal demand notice Ex. CW1/4 was sent to the accused on two addresses. One of them is R590, Malhotra House, Rishi Nagar, Rani Bagh, Delhi110034. The UPC receipt is Ex.PW1/7 and registered cover is Ex. CW1/5 and CCJ/NDD/ND : 02.01.2010 8 Ex. CW1/6. The acknowledgment due is also exhibited as Ex. CW1/8 and Ex.CW1/9. The address on Ex. CW1/8 i.e. A.D. and the address furnished by the accused, when he was examining under section 313 Cr. P.C. are the same address. It is the view of the court that accused was served with legal demand notice.
10. The next question before this court is whether the Aluminium Composite Panels were delivered to the accused vide document Mark A. In this regard, the examination of CW1 Vinod Kumar is important. The witness has deposed in examination that he does not have any personal knowledge of the transactions between the complainant company and accused. So, the case of the complainant company is totally rest upon the document mark A. Admittedly the document mark A is a photocopy. The document has been marked as A. It is established precedent of law that mere marking of document does not mean that the document has been proved or disproved. It is the court who has to appreciate the evidence. The document has not been admitted by the accused. The Hon'ble High Court of Orissa in case titled "Subarna Barik Vs State" AIR 1976 Ori 236" held that:
"Photostat copy - Photostat copy can only be admitted as secondary evidence and not primary evidence. Even if photostat copy is tendered to the signatory and he admits it to be signed by him, the said copy cannot be admitted in evidence unless the copy is proved to be genuine."
CCJ/NDD/ND : 02.01.2010 9 The complainant has not examined the preparator of document mark A despite giving opportunity on the application under section 311 Cr. P.C. as earlier the post notice evidence was closed and case was come at the stage of final arguments. The CW1 has deposed in his examination that the complainant used to get signatures as receiving of material from purchasers on the bills raised by the complainant company against any delivery of articles. But in the present case, no such receipt has been placed on record which shows that the articles were supplied to the accused. On the other hand, it is the defence of the accused that the cheque Ex. CW1/2 was handed over to the complainant only as advance for supply of Aluminium Composite Panels and he has not received the articles. The witness examined by the complainant does not know the transaction between the complainant and accused, The witness namely Sushil Upadhyay has not been examined. The original document mark A has not been produced in the court. I think that the mark A was a vital document which has been withheld by the complainant despite giving opportunities. It is established precedent of law that a party has to produce all relevant records within his possession, if he does not produce the documents, he has to face consequences. Here in the present case, there is no fact mentioned in the complaint on which date the material was demanded by the accused. On which date the material was supplied to the accused. Even this fact has not been mentioned in the complaint why complainant has waited for more than one year to get cheque from the accused, as the bill mark A is of dated 23.01.2006 and cheque is of dated CCJ/NDD/ND : 02.01.2010 10 06.02.02007 which gives force to the defence of the accused that he has not received the material and the cheque was given as advance only. The Hon'ble Supreme Court of India in case titled "'Kumar Exports Vs Sharma Carpets" (2009) 2 Supreme Court Cases, 513 has held as under: "The accused in a trial under section 138 of the Act has two options. He can either show that 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, bare denial of the passing of the consideration and existence of debt, apparently does 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 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 ad debt did not exist or their non existence was so probable that a prudent man would under the circumstances of the case, act CCJ/NDD/ND : 02.01.2010 11 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 shifted again on to the complainant. The 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 Section118 and 139 of the N.I.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 be the court, having regard to all circumstance 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.
The Hon'ble High Court of Delhi in case titled "M/s. Pine Product Industries and Anr. Vs M/s. R. P. Gupta & Sons & Anr." held as follows: "Apart from this, there is no mention in the complaint as to when the amounts were or amount was paid. What was the rate of interest, what was the CCJ/NDD/ND : 02.01.2010 12 extent of the goods which were supplied and adjusted against the payment. Further more,in the testimony of PW1, it is not indicated as to when the said advance of Rs. 5 lakhs was made, on which date the goods were received, what was the rate of interest. From which date the interest was to be computed and how was the figure of Rs.2.96 lakhs representing the principal amount computed. Nor is there any computation of the interest element of the difference between Rs. 3.15 lakhs and Rs. 2.96 lakhs indicated. All these details are conspicously absent. The petitioner has been convicted and sentenced on the vague and bland allegation that cheque of Rs. 3,15,000/ had been issued by the petitioner in discharge of liabilities of repayments of amounts taken by him. This is the only statement contained in the complaint and no further details are forthcoming even in the evidence led by the complainant."
11. Ld. counsel for accused has further argued that document mark A is not correct and for the Aluminium Sheets the Delhi Government has prescribed a vat of 12.5% while in document mark A, vat has been charged only by 4%. I have also given my attention to the public document of the year 200809 published by the Department of Trade and Taxes in which the vat for the Aluminium Composite Sheets has been prescribed as 12.5%. The question of vat has been settled by Commissioner Vat, Delhi on 08.08.06 but the alleged transaction is on dated 23.01.06. So this document has no bearing in the present case as the vat has been settled by Vat Commissioner, Delhi on 08.08.06 after issuance of document mark A, the bill in question.
CCJ/NDD/ND : 02.01.2010 13
12. It is the view of the court that the document mark A has not been proved and the complainant has failed to prove the consideration against which the cheque was issued.
13. No doubt, as per legal propositions, there is presumption in favour of the complainant under section 118 (a) of the N.I. Act and 139 of the N.I. Act until contrary is proved. The question arises whether in the light of evidence adduced on record, accused has able to rebut the presumption under section 139 of the N.I. Act.
14. From perusal of evidence adduced on record and in view of the judgment of Hon'ble Supreme Court, I come to conclusion that the accused is able to rebut the presumption u/s 118 (a) and u/s 139 of the N.I. Act. The cheque in question was not issued towards any legal recoverable liability and debt. Accused is acquitted. Bail bond cancelled. Surety stands discharged.
File be consigned to Record Room after compliance.
Announced in open court. (Jagdish Kumar) 02.01.2010 Commercial Civil Judge, New Delhi District.
Cases under section 138 has been marked to this court by Ld. District JudgeI and Session Judge, Delhi in persuasion of order th no.74812962/5485/F.3(4) MM/Gaz/2008 dated 30 October, 2008.
CCJ/NDD/ND : 02.01.2010 14 CCJ/NDD/ND : 02.01.2010